So You Made Money on GameStop, Now What? A Primer on Capital Gains

What Gamestop Gains And Losses Mean For Your Taxes

Indeed, The Internal Revenue Code differentiates “short-term” capital gains/losses and “long-term” capital gains/losses. Generally, a taxpayer that holds the asset in question for more than one year will get “long-term” capital gains treatment, and if held for one year or less, the asset will get “short-term” capital gains treatment. Different rules do exist for assets obtained by gift, devise, etc. This characterization is important because it carries significantly different tax outcomes for the taxpayer.

What Gamestop Gains And Losses Mean For Your Taxes

If you don’t have faith in GameStop’s longevity, there’s no need to hold on to your stock for the sake of taxes. You can always take gains now and take advantage of tax-loss harvesting to offset your short-term gains with short-term losses from other stocks in your portfolio that have lost their sparkle. This is a popular strategy that is frequently used by investors aiming to reduce their tax bill. Short-term gains are typically taxed at higher rates than long-term gains. This sharp spike in value resulted in a windfall for many investors who chose to sell when it was at its peak. Quite a few of the retail investors who cashed out are day traders and more casual participants in the stock market.

Today’s Tax Tip

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The simultaneous rallies in volatility and the share price served as a “harbinger of downside to come,” she said.

What Gamestop Gains And Losses Mean For Your Taxes

You get a tax-rate break on this so-called unearned income because, goes the argument, you should be rewarded at tax time for allowing your money to be tied up for a longer What Gamestop Gains And Losses Mean For Your Taxes period. GameStop stock at one point was up more than 1,700 percent since the start of the year. Its closing price yesterday, Wednesday, Jan. 27, was $348 a share.

Paycheck Protection Program (PPP) Amended to Include Businesses with Less than 20 Employees

The GameStop stock price run-up essentially resulted from a pump-and-dump scheme. If you fail to make those quarterly payments, you could owe a penalty based on how much you ended up underpaying and for how long. Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Current Mortgage Rates Up-to-date mortgage rate data based on originated loans. A bear squeeze is a situation where sellers are forced to cover their positions as prices suddenly ratchet higher, adding to the bullish momentum.

Interest income for financial institutions is reported net of interest expense and provision for credit losses. Where this item is not contained on the company consolidated financial statements and cannot otherwise be imputed the value of 0 is used. All investors should keep careful track of their purchases and sales. While apps like Robinhood can help you keep track of these activities, paying the correct amount in taxes is ultimately your responsibility. As highlighted above, gains can be costly, and losses can offset how much taxes are owed at the end of the year.

The Potential Negative Effects of Section 280E and One-Sided Marijuana Taxation

These include profits on the sale of stocks that are held for more than one year. They are taxed at varying rates that top out at 20% (compared to 37% at the high end for short-term capital gains), including the 3.8% premium for high-earners. An investor who doesn’t hold the stock for long, or who invests in one of the roughly half of all companies that now don’t pay dividends, won’t make money off the company’s performance itself. Instead he or she will make money off capital gains — in other words, the difference between what that person paid for the stock and what the next investor pays them for it. As a result technical analysis tends to drive modern market prices, as investors increasingly trade based on the strength of the stock rather than the company underlying it.

  • Short-term capital gains are typically taxed at a higher rate than long-term capital gains.
  • The holding period in stock received from a stock split or a stock dividend is the same as the holding period for the original shares.
  • Their emotionally detached nature means they cannot be accused of attempting to drive down prices.
  • Historical Mortgage Rates A collection of day-by-day rates and analysis.
  • Mason loves the culture at Boxelder, and loves helping people in need of tax advice.

We have many different tools that can be utilized to determine how healthy GameStop Corp is operating at the current time. Most of GameStop Corp’s value examination focuses on studying past and present price action to predict the probability of GameStop Corp’s future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move GameStop Corp’s price.


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