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Re: [RT] Tax question on cap gains



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The 20% applies only to LONG term capital gains.  Short term capital gains are taxed at your regular tax rate.

>>> fritz@xxxxxxxx 12/08/00 01:30PM >>>
We went in for our annual "what's the damage" meeting with our CPA 
yesterday, and it wasn't pretty.  What surprised me the most was the 
tax rate on my trading profits.

The CPA showed us two cases, with and without my trading.  He knows 
about and used the 60/40 split on futures trading profits.  In spite 
of that, the taxes on my profits amounted to almost 37%!!  That 
includes state taxes, but the state tax rate is no more than 5%.

I'm having trouble finding what the long/short term rates SHOULD be, 
but according to http://www.irs.gov/prod/tax_edu/teletax/tc409.html 
and page 61 of form 550 (http://ftp.fedworld.gov/pub/irs- 
pdf/p550.pdf) the "highest tax rate on a net capital gain is 
generally 20%."  We're in a high bracket but I thought 20% was still 
the max for cap gains.

Can somebody shed some light on this?  What tax rate should I expect 
on my profits?

Thanks,
Gary



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