Hey guys

I need some help to 100% understand how capital gains will be calculated as I am starting to swing trade more than I have in the past

Everything below is assuming short term (>1 year) and without considering the $3000 in loss allowance per year

Scenario 1:
Buy Stock A worth $1000 which I sell for $500 for 50% loss
Buy Stock B worth $1000 which I sell for $1500 for 50% gain

In this case, these are 2 different stocks. Does the net gain calculation work by combining both investment and gain for both stock for year end tax purposes?

So $2000 invested $2000 sale so $0 gain and thus no tax?

Scenario 2:
Buy Stock C at $1000 which goes down to $500. DCA and buy $1000 more for total of $2000 invested. Sell at $2000 total (meaning there is a loss on the first lot and a gain on second lot)

In this case, the net gain is still 0. Is the first lot and second lot of investment taxed differently or viewed by combining both investment and gain for this stock for year end tax purposes?

Thanks a lot for helping - will be tipping the helpful reply

which country are you talking about?
cos in some european countries it works like this:


Scenario 1:
Buy Stock A worth $1000 which I sell for $500 for 50% loss - irrelevant and non taxable as short term investment losses are non taxable
Buy Stock B worth $1000 which I sell for $1500 for 50% gain - taxable $500

sorry i'm talking only about US tax laws

I need some help to 100% understand how capital gains will be calculated as I am starting to swing trade more than I have in the past

Everything below is assuming short term (>1 year) and without considering the $3000 in loss allowance per year

Scenario 1:
Buy Stock A worth $1000 which I sell for $500 for 50% loss
Buy Stock B worth $1000 which I sell for $1500 for 50% gain

In this case, these are 2 different stocks. Does the net gain calculation work by combining both investment and gain for both stock for year end tax purposes?

This would result in a zero calculation on your Short-term transactions for covered tax lots. -500 + 500 basically.



So $2000 invested $2000 sale so $0 gain and thus no tax?

Scenario 2:
Buy Stock C at $1000 which goes down to $500. DCA and buy $1000 more for total of $2000 invested. Sell at $2000 total (meaning there is a loss on the first lot and a gain on second lot)

In this case, the net gain is still 0. Is the first lot and second lot of investment taxed differently or viewed by combining both investment and gain for this stock for year end tax purposes?

So you'd have two seperate lots, most exchanges allows you to sell by specific lot ID so you have the opportunity to only less the negative one if you were looking to get it done before EOY for tax purposes.

But if w/e, you could do the same thing, short term transaction capital loss + capital gain which net would be 0.


If you're day trading, pay attention to wash sales also.

Spread accross Tech

10% crypto

so to summarize what you are saying; regardless of how many stocks i have, if the investment made is 10k and i sell everything at 10k (with various % profit and loss across those stocks) since the net gain is 0 = no tax

is this correct? again, this is US tax

No, unless your shuffling around holdings in an IRA, 401k they tax you every transaction you sell and make a profit.
If held for a year or longer its Capital Gains tax rate.
If held for under a year you get taxed as if it was "Income"

Every trade is taxable

If you made profit during the trade , gotta pay tax. Every trade is taxable. Short term tax is Equal to income tax

If you lost. You can only write off up to 3,000$ In loss.

If you hold for a year without trading = 0-20% tax

Net gain of 0 = no tax

Gains and losses cancel each other out... whats left over postive or negative will be taxable

(This is on a yearly basis)

This post was edited by Pharaohmon on Mar 10 2022 02:24am

Idk. I only have capital losses