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Finance: What is Capital Gains Tax? 7 Views
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Description:
What is Capital Gains Tax? Capital gain taxes are taxes collected by the IRS on trading profits from investments in equities, real estate, or any other type of transaction in which something defined as an asset is bought and then resold at a profit. The amount of assessed capital gains taxes is contingent upon the length of time the asset was held.
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- Terms and Concepts / Index Funds
- Terms and Concepts / Investing
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Transcript
- 00:00
Finance a la shmoop what is capital gains tax? alright people you've invested
- 00:08
your hard-earned savings from working 72 hours a week all year you put 10 grand
- 00:13
to work seven years ago in buying Heinz ketchup stock at 50 bucks a share
- 00:18
200 shares then this year along comes Warren Buffett and Berkshire Hathaway to [Warren and Berkshire appear]
- 00:23
confirm what a brilliant investor you were and they buy for all cash the
Full Transcript
- 00:28
company Heinz ketchup for $200 a share you've made four times your money in
- 00:33
seven years nice work well you have a gain of 150 bucks a share which you are
- 00:38
gonna fully realize like you'll realize that capital gain in the form of
- 00:43
receiving cash like oh I realize I have cash in my bank account yay me!
- 00:47
so all this was so good such a nice day until you realize that you live in a [Woman frollocking in a meadow]
- 00:53
blue state with massive taxes and that you'll now give back about a third or
- 00:58
more of your investment gains that is you invested 10 grand it became 40 grand
- 01:04
the old-fashioned way you had 30 grand of profits and now uncle sam says i want [Uncle Sam demanding I want your cash]
- 01:10
your cash and you now pay about 10 grand roughly a third of it in taxes of
- 01:17
your gains of that 30 grand back to Uncle S, sadly you are paying back in
- 01:22
taxes about the same amount you invested in the first place yep lots of hard work
- 01:27
lots of taxes how's that feel?
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