What are the tax implications of selling stocks?

What are the tax implications of selling stocks?

When you sell stocks, you may incur capital gains tax on the profit made from the sale. This depends on how long you've held the stocks.

What is the difference between short-term and long-term capital gains?

Short-term capital gains apply to stocks held for one year or less and are taxed at ordinary income rates. Long-term gains apply to stocks held for more than a year and are usually taxed at a lower rate.

Are there any exemptions or deductions I should be aware of?

Yes, you can offset capital gains with capital losses, and there are exemptions for certain types of sales, like your primary residence.

How do I report these gains on my tax return?

You report capital gains on Schedule D of your tax return. Make sure to keep records of your transactions for accurate reporting.