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Level 6

Beginner investing

If I invest $10,000 in an individual taxable brokerage account for growth at moderate risk between stocks and bonds. And left for lets say 5 years (hypothetically speaking), it grows to lets say $15,000 within that timeframe. If i then attempt to make a 100% withdrawal (saying broker fees=0.25%) how much tax you think would be taking from that amount or what tax bracket would it be in? The tax part is where I get lost. Thanks!

3 Replies
Level 20

Beginner investing

Basically, if it sits more than a year, then it's a long term investment and the gain get taxed at your normal tax rate, depending on what tax bracket you fall into in the year you cash out of the investment.

Level 7

Beginner investing

hello Novech

I respectfully disagree with the answer you were given

The gain you mention in your question is a capital gain.  It is a long term capital gain since in your example you held teh commodity over one year.

It will therefore be taxed at one of the three long term capital gains brackets the IRS has established for 2018.  Which one of teh three you fall in, 0 15 or 20 % will depend on your total income that year, namely on your tax bracket. 

If you are in teh 10 or 15 % tax brackets, then your long term capital gain tax is zero.

If you are on teh highest tax bracket for that year, tehn your long term capital gain tax will be 20 %.

If you are on any of the other tax brackets, then your long term capiatal gain tax will be 15 %

I hope this helps

Good luck!

 

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Level 8

Beginner investing

Depends on your income. If these are long term gains, then it will vary based on your overall income. If you have other income you might plan on roughly setting aside 15% (for the typical income out there). There are actually several long-term gains rates but they are income-dependent (and you can easily look those up).