Hello Trader,
Tax day is normally April 15 (they pushed it back for pandemic reasons), so I wanted to share some trading-related tax knowledge with you.
Capital gains on equities and similar assets are taxed at lower rates if you hold 'em for more than a year.
15% is the highest long-term capital gains tax rate.
So if you buy Apple stock today and sell it in May 2022, you pay a smaller percentage of your gains than if you sold it next month.
But like I said, traders have to wait a year to see any tax savings.
Well, not always...
See, there's a nifty little section of the tax code called Section 1256 that futures traders like myself love.
Section 1256 basically states that (under many circumstances) your capital gains taxes on futures are split two ways, regardless of when you sell the contract:
- 40% profits taxed at your ordinary rate (the rate you pay on regular income and short-term capital gains)
- 60% profits taxed at your lower, long-term rate
So if you bought a $10,000 futures contract and sold it for $12,000 six months later, you'd have a $2,000 gain.
40% of that is hit with your normal rate, while the other 60% gets the lower long-term rate, even though you only held the thing for half a year.
Instant tax savings!
And when you're in a higher tax bracket (like 37%), trust me — the savings add up.
That's why I'd recommend trying futures trading if you're looking for a side hustle and are fine with the risk involved (don't trade with money you can't afford to lose).
Section 1256 helps you keep more of your profits to reinvest and potentially grow your wealth faster.
If you'd like to jump into the futures market with some guidance to improve your chances of earning profits, consider my Big Energy Profits service.
Inside BEP, you see and follow along with the exact longer-term "position" trades my money is sitting in.
These are the trades that earn me the bulk of my income for the year, so I have skin in the game.
Plus, I offer up plenty of daily and weekly futures and options trade ideas with great potential for quick wins.
Watch this free training video where I explain all the benefits of Big Energy Profits membership and see if it's right for you!
To your trading success,
| | | | Anthony Speciale Jr Editor & Chief Investment Strategist, Big Energy Profits | | | | team1@hawkeyetraders.com
bigenergyprofits.com
Call us: (888) 233-8598
| | | | DISCLAIMER: * Futures, stocks, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures, stocks, and forex markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, stocks or forex. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. Past performance of indicators or methodology are not necessarily indicative of future results. CFTC Regulation 4.41 These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. We'll always treat your personal information with the utmost care and will never sell it to third parties. You can find out more about what data we hold about you, why we need it, and how we keep that information safe in our Privacy Policy. | | | | |
No comments:
Post a Comment