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Mutual Funds Videos 165 videos

Finance: What is Efficient Markets Theory?
141 Views

What is the Efficient Markets Theory? The Efficient Markets Theory says that stocks trade at their fair value all of the time, assuming all informa...

Finance: What is a Fund of Funds?
5 Views

What is a Fund of Funds? A fund of funds is a mutual fund strategy that invests in other funds rather than investing in stocks or bonds. The underl...

Finance: What is the Russell Index?
4 Views

The Russell Index is a series of indices that tracks the progress of stocks in a given basket. Aw. We were hoping it tracked adorable Jack Russell...

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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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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

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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