Penny Stock investing

[billy82269]

I have never had anything to do with the market. I just recently thought it would be fun to put $600 or so in scott trade and do short term investments in the wildly swinging penny stocks for fun. I figure it is better odds than the casino. My question is about taxes. Is capital gains all you pay on stock profits or do they also add to your income. I would likely be making alot of little sales, so do I need to keep record myself of my buys and sales for the IRS or can the brokerage do that? The buying and selling is so easy, I just hope I don't get myself in trouble with the IRS.

 

[sgt z]

IIRC Taxes are based on net gains. My broker sent me 1099's for taxes.

 

[Quickdraw22]

I figure it is better odds than the casino.

Get back to us in a few months and tell us how you feel. I know a few people who have lost quite a bit in penny stocks...

 

[sgt z]

Make sure your stock has enough daily volume to move in/out easily.

 

[Xenon]

The capital gains are a completely separate tax and not additionally included in ordinary income. If they are held for less than a year, the impact will be the same though...just not added twice.

Scottrade should keep a record of your purchases and sales, but it may be a good idea to have a spreadsheet going of what you are doing, just in case you don't get the exact info you want at the end of the year.

 

[Masonmedic]

So....how did it go?

 

[skyblue]

best investment in 2012. will be a steady earner. Invest in GUns

 

[03protege]

Carefully billy. I wouldn't hold those overnight. If you ever read an article saying something is a great buy it is a lie. They run the price up then get you to hold the bagage while they laugh their way to the bank.