2 Basic Questions about Taxes on stocks...please check

[El_Mero_Mero]

I only buy and sell using the Robinhood app currently and I'm currently not doing anything special, just basic buying and selling

1.) Question about Stocks and Taxes:

Lets look at these 2 different scenarios.

Scenario A: I purchase 5 different stocks, and I buy and sell them throughout the year. By year's end, I've sold and purchased the same stocks 15 times each throughout the year. By year's end, would I have to pay taxes for every single transaction?

Scenario B: If I purchase 5 stocks at the beginning of the year, then sell those 5 stocks mid-year, and then buy those 5 stocks again before year's end, what will my taxes look like by year's end (in this scenario, I've only sold each stock once)?


2.) My other question is: Does everyone here buy into one of the funds likes SPY? I know that everywhere I've read says to invest in one of those, and maybe not even deal with individual stocks, but personally think individual stocks are more fun and exciting to get into. But does everyone here at least own one of those like SPY? If so, which would you recommend?

 

[NeilCartwright]

I’m in a similar position, I only use Robinhood. This past year for taxes they just hit me with the capital gains tax on the money I made. They give you a couple forms to attach to your taxes when it’s time. I used turbo tax last year.

I can’t speak to the differences in your scenario with the number of transactions and if that will make a difference. I honestly don’t think it will. But I only had a few thousand in there

And yea I like ETFs. I have the S&P 500 and a technology ETF. As far as if they’re better than individual stocks, I think they are if you have a certain amount per month you want to throw Into the market. Just set it and forget it, and the returns are decent.

 

[Secure Da Bag]

I thought you don't pay taxes if you buy stocks, sell those stocks, and then use that money to buy more stocks.

 

[El_Mero_Mero]

ForDaBag, I'm not certain at all, but that's what I would like to find out. Hopefully somebody here has an answer, otherwise I'll just ask on Reddit in a couple of days.

NeilCartwright, what's the name of the technology ETF that you're invested in?

 

[Ghostface Trillah]

Sounds like you're trying to loophole capital gains tax. It's not worth it.

 

[El_Mero_Mero]

Sounds like you're trying to loophole capital gains tax. It's not worth it.

Nah, I'm just now learning the basics of economics and stocks. This post is just me asking basic questions and seeking "explain like I'm 5 (ELI5)"- type answers.

 

[NeilCartwright]

ForDaBag, I'm not certain at all, but that's what I would like to find out. Hopefully somebody here has an answer, otherwise I'll just ask on Reddit in a couple of days.

NeilCartwright, what's the name of the technology ETF that you're invested in?

The ticker is VGT

And I feel what the OP is saying. Just like there’s ways to minimize taxes on real estate expenses, operating costs in another hustle, or just deductions in general. No harm in asking.

For the stocks I just do my thing during the year and when it’s tax time I print out the forms the brokerage (in this case robinhood) auto generates and add it to my TurboTax return lol.

 

[Sugarbush]

I thought you don't pay taxes if you buy stocks, sell those stocks, and then use that money to buy more stocks.

You’re taxed on what you sell (capital gains tax)

Sounds like you're trying to loophole capital gains tax. It's not worth it.

Nah, I'm just now learning the basics of economics and stocks. This post is just me asking basic questions and seeking "explain like I'm 5 (ELI5)"- type answers.

Google the Wash Rule for Scenario A and I believe that’ll answer your question

I invest in VTSAX in my IRA and also Betterment’s ETFs for general investing

 

[Swirv]

Capital Gains Tax 101

 

[UncleTomFord15]

Good question