Do I get taxed capital gains short term for options trading even if money is reinvested in another options or shares and is not withdrawn or pulled out from brokerage?

Forum|Forum|4 years ago
February 17, 2022
3 replies
43 views

No text available

TurboTax Deluxe Online

ThomasM125

Level 15

Yes, anytime you receive proceeds from investment sales you have to recognize a gain or loss on your tax return. It does not matter that you left the proceeds with your broker to acquire other investments.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

virtualamandaAuthor

Level 2

@ThomasM125 Thanks, Thomas, and please be patient with me.

I was taxed for small earning from selling calls last 12/31 but the value of that stock dropped and I am now at a loss. Can I recover the tax?

Also, I hope not but just to confirm do you get taxed for losses in stocks?

When stocks are at a loss (value went down), do you declare that under deductions?

Does it matter if you sell stocks before the first year since it is at a loss or is it a bigger deduction if you sell it after one year?

ThomasM125

Level 15

You can't deduct a loss on an investment until you sell it or it becomes worthless. So, if the stock you mention went down in value but you still own it, you can't deduct the loss.

You do not get taxed on losses on stock sales, you can deduct a net loss for the year up to $3,000 against ordinary income.

You need to hold an investment for more than one year to get capital gains treatment on the sale of it. Capital gains treatment means you may get a more favorable tax rate applied to the gain than you would on your ordinary income (wage income for instance.)

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"