Capital Gains Tax...

BradMM said: ".... how do you manage yours? What do you think about this tax? :wtf: (I probably can guess!) I'm just NOW searching to see how many times this has been covered. :confused:"

cwms said: "How do you manage it? You have capital gains....you pay taxes on them. Not sure what you are asking. As far as my investments go, 99% of my investments are in retirement accounts so I don't have to worry about capital gains. On this same topic, I had a financial person tell me that most financial "experts" fully expect Congress to raise capital gains tax rate next year. Anyone care to chime in on this?"

StockHunter said: "[QUOTE=cwms;69957]....On this same topic, I had a financial person tell me that most financial "experts" fully expect Congress to raise capital gains tax rate next year. Anyone care to chime in on this?[/QUOTE] All I know is obama wants to [U][B][I]DUBBLE[/I][/B][/U] it!!! Grr! :lamer: :dazed002:"

BradMM said: "[QUOTE=cwms;69957]How do you manage it? You have capital gains....you pay taxes on them. Not sure what you are asking. As far as my investments go, 99% of my investments are in retirement accounts so I don't have to worry about capital gains. On this same topic, I had a financial person tell me that most financial "experts" fully expect Congress to raise capital gains tax rate next year. Anyone care to chime in on this?[/QUOTE] Well, putting 99% of your investments in retirement accounts is one way of managing your capital gains taxes, right? 100% of mine are in retirement accounts. I'm over 50 so I'm maxing out my 403b at $20,500 this year and in the future unless the cap is changed. I max out my Roth each year. Plus, in five years I'll be eligible for the State pension so I think I'm covered there for the most part since my wife is doing all the same above. I just don't think I want to tie up more $$$ in a traditional IRA which is one of only two options left to me that I can think of. So, that leaves a straight brokerage account. There's a different rate for short or long term cap gains so does that impact the way that you trade? I believe that the Bush cap gains tax reduction will run out some time in the next few years. MANY people have claimed that Obama wants to double the rates so a lot of this is unknown but we still have to move forward. I would also like others to chime in."

cwms said: "Well, if Obama is elected, he will most likely have a Democratic Congress to work with and he just might get his wishes on higher capital gains tax rates. Wall street does not like the Congress and President to be from the same party, and it doesn't matter which party. Wall Street much prefers the stalemate of the president being from a different party from the legislative majority."

BradMM said: "[QUOTE=cwms;69977]Wall street does not like the Congress and President to be from the same party, and it doesn't matter which party. Wall Street much prefers the stalemate of the president being from a different party from the legislative majority.[/QUOTE] Being a life long Dem., I find that as I get older I get more pissed about tax issues than I did when I didn't have much to tax. Yes, Dem's are associated with higher taxes but it's the current Rep who got us into a war that's cost us trillions that will have to be paid back somehow. I'd rather it be paid from lower taxes on larger economic growth but everything I read (don't know if it's biased) states that higher capital gains taxes actually produce lower revenue!"

StockHunter said: "[QUOTE=BradMM;69989]Being a life long Dem., I find that as I get older I get more pissed about tax issues than I did when I didn't have much to tax. Yes, Dem's are associated with higher taxes but it's the current Rep who got us into a war that's cost us trillions that will have to be paid back somehow. I'd rather it be paid from lower taxes on larger economic growth but everything I read (don't know if it's biased) states that higher capital gains taxes actually produce lower revenue![/QUOTE] lol try looking @ how much medicare costs us vs. the war. Medicare is in the TRILLIONS!!! Where as the war is in the billions. I don't like the current prez's policies either (i.e. bigger government, patriot act, corn subsidies, devaluing the dollar, etc.) about the only conservaive thing he has done is tax cuts."

cashlover said: "Comrade Obama might as well take all our money away and just put everyone on welfare."

BradMM said: "[QUOTE=StockHunter;70025]lol try looking @ how much medicare costs us vs. the war. Medicare is in the TRILLIONS!!! Where as the war is in the billions. [/QUOTE] At least that money is being spent over here and not dropped over in a foreign country for the purposes of (if I were to be cynical :th_angelsmiley4:) making political supporters of the Pres boatloads of cash which likely is also making it's way into the Bush and Chaney pockets. Ok, I'll go hide for a while."

StockHunter said: "[QUOTE=BradMM;70079]At least that money is being spent over here and not dropped over in a foreign country for the purposes of (if I were to be cynical :th_angelsmiley4:) making political supporters of the Pres boatloads of cash which likely is also making it's way into the Bush and Chaney pockets. Ok, I'll go hide for a while.[/QUOTE] all that money does is drive up the cost of health care on the rest of us. not only do we pay for it with taxes but we also pay for it via the high costs created from it. If we got rid of medicare the cost of health care would be cut in half. My point in saying "....try looking @ how much medicare costs us vs. the war...." was, quit complaining that the war costs so much when it's not even 1/4 of the national budget. I used medicare for an example."

prohobo said: "Getting back to the OP....(away from the politics).... If you are able to elect the 1256 rule and also get your firm to provide mix-straddle treament - this is the best option. Or you can live in the U.S. Virgin islands and apply for the 3% cap gain tax. Beyond that - sticking it in a tax (DEFERRED) account is your only option. Otherwise good luck taking home a profit after short-term gain taxes. I wonder how retail day-traders make a dime (between their margins, taxes, and commission structure). I will stay happily over on myside of the fence - otherwise I would be out of business."

StockHunter said: "[QUOTE=prohobo;70100]Getting back to the OP....(away from the politics).... If you are able to elect the 1256 rule and also get your firm to provide mix-straddle treament - this is the best option. Or you can live in the U.S. Virgin islands and apply for the 3% cap gain tax. Beyond that - sticking it in a tax (DEFERRED) account is your only option. Otherwise good luck taking home a profit after short-term gain taxes. I wonder how retail day-traders make a dime (between their margins, taxes, and commission structure). I will stay happily over on myside of the fence - otherwise I would be out of business.[/QUOTE] I daytrade and my goals are 3% a week on my money, but lately I've been getting 2.30%-2.50%. I don't get hit on taxes until the end of the year, and I budget my $10 trading fee (per trade [$10 to enter + $10 to exit = $20 round trip]) into each trade before my entry. In my long term budget/goals I put in about 40% in taxes for the 1st year, 50% for the 2nd year, and 60% for the 3rd year. I maybe over budgeting, but I figure once I file a gain I will know how it works and be able to budget less (I hope lol)."

prohobo said: "[QUOTE=StockHunter;70108]I daytrade and my goals are 3% a week on my money, but lately I've been getting 2.30%-2.50%. I don't get hit on taxes until the end of the year, and I budget my $10 trading fee (per trade [$10 to enter + $10 to exit = $20 round trip]) into each trade before my entry. In my long term budget/goals I put in about 40% in taxes for the 1st year, 50% for the 2nd year, and 60% for the 3rd year. I maybe over budgeting, but I figure once I file a gain I will know how it works and be able to budget less (I hope lol).[/QUOTE] You are a rare bird.... I think you can increase those precentages in the right structure. Rather than subcumbing to the Reg-T way, which I call the Reg-Wrong way. Again - that is if you want to turn trading into a business, rather than a hobby or an investment."

BradMM said: "[QUOTE=prohobo;70100]Getting back to the OP....(away from the politics).... If you are able to elect the 1256 rule and also get your firm to provide mix-straddle treament - this is the best option. Or you can live in the U.S. Virgin islands and apply for the 3% cap gain tax. Beyond that - sticking it in a tax (DEFERRED) account is your only option. Otherwise good luck taking home a profit after short-term gain taxes. I wonder how retail day-traders make a dime (between their margins, taxes, and commission structure). I will stay happily over on myside of the fence - otherwise I would be out of business.[/QUOTE] RE: politics, unlike many people, I don't claim to know the answer but I would love to understand the [B]truth[/B], if an ultimate truth could be sorted out. Your points are well taken and I think they are valid but I do believe that there are so many factors that come into play in how we got to where we are today and, since we supposedly live in a pluralistic society, many agenda to compromise among. As I get older, I'm personally more concerned with the economy because I realize that I can't support myself with my current earnings forever (I can't physically work forever) and I don't want to be supported by the go'ment so I need to manage and preserve as much wealth as I can muster. Which leads me to this thread. I was wondering how one would wind up making much in the end given the "costs of doing business." I'm not familiar with the 1256 rule or the mix-straddle treatment so you've given me what I was looking for... direction on where I need to be looking! BTW, the USVI wouldn't be so bad, either. I've gone diving there once but the stories about essentially martial law after a hurricane were kinda scary! Thanks!"

prohobo said: "Trading is like any business, you need to manage costs of business (from taxes, commissions, services, etc.) I have been on the JBO/Haircut side since 1989 and thought about venturing over to Reg-T back in 2000. We decided to stayly firmly on the JBO side, there was no benefit at all on the Reg-T side. Everything was a determent to us being successful, the costs were just to high. 1. Our margins for the same positions would increase in some examples 5x - 50x. 2. Our commissions would double. 3. Our interest rate spreads would be so wide I could drive a train through them. 4. Our taxes increased from about 20% to over 30% 5. The legal and accounting issues doubled as well. It was just too cost prohibitive for us to move over and we decided to stay in our world. Of course our strategies are not day-trading and very different. We are also trading with a larger sum than a typical retail trader. These need to be taken into account as well. However, even my personal accounts are not in the Reg-T world and if I had to do this again as an individual trader, knowing what I know - I would stay out of the retail world from day one."

StockHunter said: "[QUOTE=prohobo;70110]You are a rare bird.... I think you can increase those precentages in the right structure. Rather than subcumbing to the Reg-T way, which I call the Reg-Wrong way. Again - that is if you want to turn trading into a business, rather than a hobby or an investment.[/QUOTE] My trading is what I make my income from (I daytrade full-time). So I do treat it like a business."

prohobo said: "[QUOTE=StockHunter;70118]My trading is what I make my income from (I daytrade full-time). So I do treat it like a business.[/QUOTE] Sorry - my statement was not to suggest otherwise. It was a suggestion to moveover to the RIGHT side of the tracks and get some serious benefits (taxes, margin, rates, interest, etc.) If you can decrease your over head, decrease your taxes, decrease captial utilization, that all spells bigger profits without you having to change your strategy."

StockHunter said: "[QUOTE=prohobo;70182]Sorry - my statement was not to suggest otherwise. It was a suggestion to moveover to the RIGHT side of the tracks and get some serious benefits (taxes, margin, rates, interest, etc.) If you can decrease your over head, decrease your taxes, decrease captial utilization, that all spells bigger profits without you having to change your strategy.[/QUOTE] no biggie :D. i get it now :). :respect:"

AlfredSokol said: "[QUOTE=StockHunter;70193]no biggie :D. i get it now :). :respect:[/QUOTE] Just a quick question: do you have strong organizational skills by nature?"

BradMM said: "[QUOTE=AlfredSokol;70200]Just a quick question: do you have strong organizational skills by nature?[/QUOTE] The suspense is killing me... please answer so I can find out what his point is! :dazed002:"

StockHunter said: "[QUOTE=AlfredSokol;70200]Just a quick question: do you have strong organizational skills by nature?[/QUOTE] Sorry for the long wait on my reply, been busy. I'd like to say my organizational skills are a 6 on a 1-10 scale (10=best) hehe :D."

prohobo said: "[QUOTE=AlfredSokol;70200]Just a quick question: do you have strong organizational skills by nature?[/QUOTE] No - I have a good lawyer, accountant, and tax person. I also have good partners. But most importantly behind every good man is a great woman. I tease my wife that she is BEYOND effecient. She reminds me of 7 of 9 from Star Trek. She is beyond organized. One thing I am good at is finding the right people and knowing what I am good at and bad at. I am very passionate and trading has been my life and only source of income. I breath it, live it, sleep it, and yes dream it."