Stock Trader

[AJJ008]

What is the name of your state? Michigan

What are the ramifications in frequent buying and selling of stocks other than the risk it imposes?

 

[JETX]

What are the ramifications in frequent buying and selling of stocks other than the risk it imposes?

You can get carpal tunnel syndrome??

 

[FlyingRon]

Is there a legal question here?

In the gambling field there is a concept called the rake or vig. Essentially, the house exacts a profit from the play over the odds. Day trading gives you some of the worst vig in that:

1. The vig is usually per transaction, lots of transactions per dollar won means less money to you.

2. Money won on bets running less than a year is short term gain and taxable as regular income (typically in the 28% range) rather than long term capital gain (15%).

I do better at poker.

 

[AJJ008]

Flying Ron I appreciate your analogy. Now, as I make short term money buying and selling do I need to pay estimated taxes for federal, state, and social security tax similar to payroll taxes.

 

[FlyingRon]

Flying Ron I appreciate your analogy. Now, as I make short term money buying and selling do I need to pay estimated taxes for federal, state, and social security tax similar to payroll taxes.

Look here for information (follow the links within it)
http://www.irs.gov/taxtopics/tc409.html

Yes you need to pay estimated taxes (you get a forgiveness on this if you pay at least
90% of the tax in the estimated payment, or 100% of what you owed last year).
See here:

http://www.irs.gov/businesses/small/article/0,,id=110413,00.html

You do not owe the self employement (social security/medicare) on this money.