Welcome to Get Smart about Investing. How are individual stock investments taxed? There are two ways you can make money with stocks. The first is from stocks that pay a dividend. Not all stocks pay dividends, but if yours does, you are required to pay tax on the dividend each year, whether you reinvest any of it or not. Dividends are taxed at fairly low rates, typically a maximum of 15 percent. For example, McDonald’s pays a $1 per share dividend each year. If you held 200 shares of McDonald’s, regardless of what the stock price is doing, each year you would receive a $200 dividend that you will have to pay taxes on. At the 15 percent rate that would be a $30 tax payment due on your $200 of dividend income.
The second way to make money from stocks is from capital appreciation. Stock prices are changing all the time, but you only realize a capital gain or loss when you actually sell the stock. With a capital gain or loss, there are really only three things you need to look at: How much did you invest, in other words, what was your purchase price or cost basis as it’s known; how much did you receive from the sale; and how long did you hold the investment for. If you bought an investment and sold it in one year or less, you would have a short-term capital gain. Short-term capital gains are taxed at your highest ordinary income tax rate. If you bought an investment and sold it after one year, any gain would be considered a long-term capital gain. Long-term capital gains are taxed at a lower rate, a maximum of 15 percent for most people. This is the government’s way of saying that it doesn’t want the average person to frequently day trade or buy and sell; therefore, it will give you a tax incentive to hold onto investments longer.
Let’s look at an example. If you invested $10,000 in Starbucks stock and sold it for $20,000, you would have a $10,000 gain to pay taxes on. If you held the stock for three months and then sold it, it would be a short-term capital gain, which would be taxed at your highest tax rate. If you had the same investment and held onto it for three years before selling it, the gain would be a long-term capital gain taxed at the lower rate, probably 15 percent. Investors in the 25 percent tax bracket would have to pay $2,500 in taxes if they had short-term gains and $1,500 in taxes if their gains were long term. That’s a big difference as far as what amount of the gain you get to keep, which is why the tax considerations of your investment is so important. Also keep in mind that if you simply hold onto a stock for several years, you delay having to pay taxes on your gains, since they are only taxed when you actually sell. This is yet another reason why long-term investing is more successful than short-term strategies.
What if you had a loss? Of course you never want to have a loss, but if you do, you can take advantage of it from a tax standpoint; you can use losses to offset taxes on gains. For example, if you had $10,000 of capital gains and $4,000 of capital losses, you could offset them by only paying taxes on the $6,000 difference rather than the full $10,000 of gains you actually had. If most your investments have been losses or don’t have any gains, you can deduct up to $3,000 of losses in a given year and carry over the additional amount into future years.
I’m Greg McGraime and Now You Know!
Filed under "Investing by Greg McGraime" by gmcgraime
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CHRISTMAS - MASS AT DAWN. By Fr. John Jay Hughes
WHAT THE SHEPHERDS FOUND.
Titus 3:4-7; Lk 2:15-20.
AIM: To instil a sense of wonder and joy at the incarnation.
The world’s great religions, someone has said, are all about the same thing: our search for God. To this general statement there is an important exception. Christianity, and its parent, Judaism, are concerned not with our search for God, but with God’s search for us. At Christmas we celebrate God’s search, and his coming to us, in a special way. The readings at this Mass give us answers to three important questions about God’s coming. They tell us how God comes, when he comes, and why.
How does God come?
He comes in very ordinary and humble circumstances, to very ordinary and humble people. There was nothing dramatic about the birth of Mary’s child at Bethlehem. Few people took any notice — only a few outsiders, and three crackpot eccentrics.
Shepherds were outsiders in the ancient world. Without fixed abode, like gypsies today, they were mistrusted by respectable people. Since they frequently grazed their flocks on other people’s land, shepherds were considered too dishonest to be witnesses in court. Because their irregular lives made it impossible for them to observe the strict Sabbath and dietary laws, observant Jews held them in disdain.
The so-called Wise Men, whose visit we commemorate at Epiphany, were eccentrics: astrologers of some kind from God knows where, who set off on a madcap journey, following a star. We call them wise. To their contemporaries they were screwballs who were not playing with a full deck.
Nor was the scene which these visitors found at Bethlehem as attractive as we make it appear in our Christmas cribs. If Jesus were born today, it would probably be in a cardboard shack with a roof of corrugated iron in Africa, or somewhere in Latin America, without electricity or water: smelly, drafty, and cold.
How does God come? He comes in ordinary and humble surroundings, to people who live on the margin of society. That is how God came on the first Christmas. It is how he comes today.
When does God come?
He comes when we least expect him — when people have given up expecting him altogether. Matthew and Luke emphasize Jesus’ descent from the great King David, and Jesus’ birth “in David’s city” (Mt 1:17; Lk 1:27, 2: 4 & 11). They wanted to show that Jesus was the long-awaited Messiah, whose birth “of the house of David” the prophets had long foretold.
Almost six centuries before Jesus’ birth, however, David’s royal house had come to an end. The revival of his long extinct dynasty after so great an interval was, humanly speaking, impossible. Moreover, the imperial census, which brought Joseph and Mary to David’s city, Bethlehem, was a humiliating reminder to their people that the nation over which David had once ruled as king was now governed by a foreign emperor across the sea. Rome, not Jerusalem, was the center of the world into which Jesus was born. At the very moment in which that world was set in motion by an imperial decree from its center, God was acting in an unimportant village on the edge of the empire in an obscure event from which we continue, twenty centuries later, to number our years.
Unthinkable? Impossible? Precisely! That is how God normally acts. He comes to us when we are least expecting him; when we have ceased expecting him at all. He comes in ways that stagger the imagination and demolish our conception of the possible. The creator of the universe comes as a tiny baby, born of a virgin.
Why does he do it? Why does God come at all?
To these questions our second reading gives us the answer: “When the kindness and generous love of God our savior appeared, [he saved us] not because of any righteous deeds we had done but because of his mercy.”
God’s coming is not a reward for services rendered. He chose to come to us at the first Christmas for the same reason he comes to us today: not because we are good enough, but because he is so good, and so loving, that he wants to share his love with us, his unworthy, erring, and sinful children.
This explains too why he chose outsiders and eccentrics as the first witnesses of his coming. Before him we are all outsiders, all eccentrics. Before God we are all marginal, as the shepherds were, and the wise men. It is His love, and His alone, which draws us in from the darkness and cold of the margin to the light and warmth of the center.
It is because God gave us his love at the first Christmas that we give gifts to one another at this season. The love God gave us then, and continues to give us today, is neither distant, nor abstract. God’s love is a person who is very close to us. His name is Jesus Christ.
Filed under "Catholic Homilies" by jhughes
