Robinhood trader made $45k trading now faces $800,000 tax bill

[teacher]

Moral of the story only do a handful of trades a month

 

[CrimsonTider]

This article is bogus. Your cost basis is adjusted when you do a wash sale. So it balances it out in the end.

Lets say buy 10k worth of stock XYZ. And you sell it for a 1k loss.
The next day you buy 10k worth of stock XYZ again. Because of the wash sale rule, Your disallowed loss is added on to your newest position. So your in the red for 1k in your newest position off the get go. It will be like you own 9k worth of stock XYZ off the rip but you paid 10k for it

And then AFTER you sell XYZ again, whatever your new net gain/loss is the new deal. It washes out the previous 1k loss on your balance sheet and replaces it.

And for all of you wondering how could he have bought and sold 45 million worth of stock over the course of the year. Its actually very possible if you place many day trades everyday and use margin.

Lets say you buy and sell 50k worth of XYZ 10 times in one day. That makes 500k worth of stock trading for that single day.

It’s not bogus if he didn’t ultimately sell the stock until 2021 and the disallowed lossses happened in 2020

it’s all timing

 

[Diyhai]

robinhood needs to really have different levels for people
their needs to be an amateur mode for people like this who just want to buy stocks and sell at profit
they aren't thinking about the capital gains tax or how your losses have to be claimed

another financial implosion from robinhood. bankruptcy will make it all better though ain't no way he has that money for the tax bill

Robinhood already has that in place he was day trading so he had to apply to be able to do that with his account

 

[Diyhai]

Did u break any trading rules in the proccess? No? Ok then, thats why. This guy did

he didnt break any rules
he just didnt understand them

 

[Secure Da Bag]

The taxable income comes from each trade; not from the net amount earned

Go from 1.4M to 45k would mean he had a loss on just about every trade.

 

[UserNameless]

This is a very particular case though. This guy was doing some crazy shyt. Even if you never hold and day trade full time you should NEVER owe more than you made. This guy was just doing some wild shyt thinking he was gaming the system. Article just seems like propaganda to scare away the retail investor because they're thriving right now. Most coli brehs don't even gotta worry about this unless you're doing the same dumb shyt this guy was doing. The only other time I've heard of people owing more than they made is when they took their profits into the next tax year and then lost it all. But they were still on the hook for their tax bill from the previous year.

Like if you made 500k in 2020. And your tax bill was 150k but you didn't set it aside. You just went into 2021 trading with that 500k. Then maybe in January 2021 the whole market crashed and your funds went from 500k to 100k. But now you're still on the hook for that 150k because it's a new year. If it's the same year you could write off that 400k loss. But you can't in a different year. That's why you should take out your tax money right when the year ends. You never know what could happen.

Soon as I read the thread title I said it was propaganda. Negroes keep telling on themselves

 

[Dilltastic VolWon(derful)]

Imagine dudes reaction when he hit submit on turbo tax and that shyt popped up on his screen

But the real question is why is a dude with that many purchases in stock in 1 year using Turbo Tax to do his taxes.

 

[Dilltastic VolWon(derful)]

Yall nikkaz believe everything read, fake ass forbe net worth statements and now this bullshyt

even it were true, he wouldn't have to pay because he doesn't have the money, the IRS will label him unable to pay

I know because I purposely filed taxes so I could income I didn't make just to get a loan, and owed the IRS hundreds and thousands of dollars in taxes more so because of penalties

I never paid a dime

There's a document called an offer in compromise you can file to get out of any tax debt, but you don't even have to do that

I ignored them the entire time and let penalties rack up, and eventually they put out a benchmark warrant for my arrest, the US marshalls came to my house first, then IRS agents before that, I was out of town when they issued the warrant

All I did was came to their headquarters and told them I was broke, they could easily see I didn't have the money to pay the shyt, and that was that, the leins and everything were taking off my bank accounts, and I was label unable to pay

you nikkaz worry about shyt too much

only people who need to be afraid of the IRS are people with money who acting like they don't have it, they can't get you for tax evasion if you don't have the money lmao how you, if you don't have the money you're not evading

and you are an absolute piece of shyt posting this garbage just for daps. I know a few people who got in trouble with the IRS and still are trying to figure out what’s next in their lives.

the mods need to delete posts/ban dumbasses like you, but this site is slowly going to shyt

 

[Master Teacher]

and you are an absolute piece of shyt posting this garbage just for daps. I know a few people who got in trouble with the IRS and still are trying to figure out what’s next in their lives.

the mods need to delete posts/ban dumbasses like you, but this site is slowly going to shyt

Look another dumb ass retard

when did I say to do what I did, I merely game an example of something I did before and nothing happened lmao, so you have to nothing to fear if you are in the situation of this trader

if you can't pay they label you as unable to collect, you only get in trouble if you are evading

they got in trouble for the IRS for what?

If you owe them money and go broke they will forgive you

you are a retard, just because your dumb ass friends were running scams, it doesn't have anything to do with I posted

I did nothing illegal anything boss, you dumb ass loser lmao

got the nerve to attack and you offered no information, you didn't explain what your dumb ass friends did who probably don't exist because you have no friends lmao

your broke ass will never have to worry about the IRS in your life lmao