Stock investment benefits and risks Back to list

Member SinceMar 07, 2022

Posts 309


Jul 26, 2022 at 20:32
Long-term investors can also benefit significantly from stock investments in terms of taxation. If they do not sell their shares, they will not have to pay taxes on the profits. Only the money they receive, such as dividends, will be taxed. As a result, they will never have to pay taxes on the profits they make from holding their shares. If they make money when they sell the stock, they will have to pay capital gains taxes on it. If they buy and sell the asset within a year, they will incur short-term capital gains. These profits will be taxed at their ordinary income tax rate. If they sell the asset after a year, they will pay the long-term capital gains rate, which is often lower. They can deduct investment losses or offset them against future gains when filing their taxes.

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