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12-23-2007, 09:42 PM
| | Member | | Join Date: Oct 2005
Posts: 32
| | | Capital gains and taxation in California?
What is the name of your state? California
I am a commodity trader who has both short term and long term gains. For federal taxes, short term capital gains are taxed at the full rate and long term gains are taxed at 15% for my bracket.
How would this work for state taxes? I live in CA. Does california tax the full 9.3% on long term gains? |
12-23-2007, 10:50 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 8,231
| | | Capital gains in ca are taxed at 9.3% like other income. There's no break in the rate for long term. They do follow the federal exemption rules for things like the principal residence however. |
12-24-2007, 09:57 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 6,673
| | | Are you sure you are a "commodity trader" who has "short and long term gains"?
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12-24-2007, 02:15 PM
| | Member | | Join Date: Oct 2005
Posts: 32
| | Quote:
Originally Posted by tranquility  Are you sure you are a "commodity trader" who has "short and long term gains"? | Yes commodities get a blended rate of short/long term gains regardless of holding period. |
12-26-2007, 09:13 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 6,673
| | Quote: |
Yes commodities get a blended rate of short/long term gains regardless of holding period.
| My question revolved more around "commodity trader". Are you regularly trading? How many trades do you do in a year? Do you do anything else?
__________________
When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it.
--W. T. Pooh (aka A. A. Milne) |
12-26-2007, 11:52 AM
| | Member | | Join Date: Oct 2005
Posts: 32
| | Yes I'm a regular trader and it's my sole source of income. I only started this year though and have about 50 trades in a short period of time. If you are asking this to see if I can apply for tax trader status, I've already checked on that and found this bit at greencompany.com Quote: |
We do not recommend IRC 475(f)(2) elections for commodities traders: Profitable commodities traders would lose the long-term capital gains rate tax advantage mentioned above. If you lose significant money trading commodities before April 15, 2002, and wish to exit the business, then elect IRC 475(f)(2) in order to receive ordinary loss treatment. You will need it.
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12-26-2007, 12:54 PM
| | Senior Member | | Join Date: Mar 2006
Posts: 6,673
| | | California treats capital gains as ordinary income.
The election is a more complex calculation as you get to mark-to-market in the calculation of ordinary income/capital gains and it is not simply a matter of if you lost over $3,000 or not--which is what the statement from the company implies.
__________________
When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it.
--W. T. Pooh (aka A. A. Milne) |
12-27-2007, 12:13 AM
| | Member | | Join Date: Oct 2005
Posts: 32
| | | Futures contracts (all the ones I trade anyways) are specially designated as "1256 contracts." They are all marked to market by default, no tax trader status required. |
12-27-2007, 11:44 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 6,673
| | | Ah. You have short and long-term gains by statute. So, back to your original question, the entire contract will be taxed as ordinary income in California. (Rather than just 40%.)
__________________
When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it.
--W. T. Pooh (aka A. A. Milne) | |
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