Pay Taxes on trading stocks?

pj94z said: "I want to understand how you're taxed for trading stocks. Can anyone point me to a quick description of how you can be taxed for: 1. buying a stock and selling it for profit in less than 1 year. 2. buying a stock and selling it for profit AFTER keeping it for 1 year. 3. If I trade stocks in my Roth IRA account, and make profit on the stocks, do I pay taxes on that profit or is it tax-free until I retire? Anything else I should know?"

HappyHarry said: "1) You pay short term capital gains tax if you hold it for less than a year 2) You pay a long term capital gains tax if you hold it for longer than a year. Any general Google search on these terms should turn of the formulas. I believe the Short term rate is 38% and the long term one is 15%."

Hex said: "38% thats awful, how do day-traders make money if there is a 38% tax reduction?"

HappyHarry said: "[QUOTE=Hex]38% thats awful, how do day-traders make money if there is a 38% tax reduction?[/QUOTE] I'm pretty sure they don't. Consider the taxes, and the huge commission costs and you have real troubles making money. I'm sure the best ones do fine, but the average players probably churn a lot of money and don't end up with that much."