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

[Eternally Jaded]

Broke Nikka Privilege, BNP Familia

 

[SadimirPutin]

Hollerin

Coli reslly treats crypto like magic

 

[Axum Ezana]

stop tryna day trade and invest in longterm surehanded shyt like apple,microsoft,nike or shyt thats going to dominate the future like tesla.

stock market(in general) is rigged and u have to be "in the know" to make fast big money like these get rich quick dudes want.

 

[OnFleekTing]

just trade in cryptos and big etfs to not run into taxes like that
anything like a meme stock that makes you a lot of money super quickly is going to put you in the hole like this guy
expect to see a lot more posts like this next year when the gamestonk folks get their turn

 

[Guile]

stock market(in general) is rigged and u have to be "in the know" to make fast big money like these get rich quick dudes want.

 

[Loose]

Sometimes day trading rules save you ha

 

[froggle]

He kept buying and selling the same stocks over and over and over again. If anything, they should put a warning or disclaimer explaining the ramifications.

Lawsuit. Robinhood did not make.it explicitly clear when I signed up, they said..press gas and go your honor
Ill settle for $800k tho

 

[Piff Perkins]

Rigged game. If you're going to jump in, you'd better know how it's rigged beforehand.

This is like playing Jenga and complaining when you lose despite not knowing the rules. This dude clearly spent a lot of time on Reddit and twitter reading about the latest stock fukkery yet spent zero time going over taxes and regulations? That’s on him.

 

[Xyrax]

Over trading at its finest. You should not be running into wash sales rules man...

 

[alpo]

Bunch of scared talk in the thread

 

[Bubba T]

Still doesn't make since

because if the stocks went back up and brought them at a lower price he will actually made the money when they went up

they not telling the whole story

he had to cash out some of those profits eventually to in order to make the income

so on paper his gains for the year are 45,000 but how many times did he transfer profits into is bank account over the course of the year

once you sell and buy back in, you start all over for position so he could've made a lot of money got the trade and started over, and didn't make shyt else for the rest of the year until he came back in green at 45k

My example was conceptual, but what could be happening in this guy’s case is that he is selling off stock at any slight dip and buying back quickly. If he is going between a bunch of stock that goes up and down, but mostly up throughout a period of time , and he is doing this within 30 days each time, he is getting a bigger and bigger amount of capital gain, without anything to offset it as his basis has more or less stayed the same.

100 - Jan 1 buy
80 - Feb 15 sell
60 - Feb 20 buy
90 - Mar 1 sell
100 - Mar 10 buy
120 - Mar 11 sell

Applying the wash sale rule, the guy’s basis in the stock would be $80 by the time he sold the stock at March 11. Which means his capital gain is $40 in the eyes of the IRS instead of $20 as one person would think. Do this a shytload of times like they said the guy was doing, and you have yourself a fun tax situation.

 

[JT-Money]

Didn't read the whole thread but this cold have been avoided trading in an ira.

Yep, that's what I did.

IRA Rules for Wash Sales

IRA Shares
Shares held within an IRA do not observe the wash sale rules, because the IRS doesn’t keep track of your gains and losses within an IRA. Except for nondeductible contributions, you pay your marginal tax rate when money exits your traditional IRA.

 

[Master Teacher]

My example was conceptual, but what could be happening in this guy’s case is that he is selling off stock at any slight dip and buying back quickly. If he is going between a bunch of stock that goes up and down, but mostly up throughout a period of time , and he is doing this within 30 days each time, he is getting a bigger and bigger amount of capital gain, without anything to offset it as his basis has more or less stayed the same.

100 - Jan 1 buy
80 - Feb 15 sell
60 - Feb 20 buy
90 - Mar 1 sell
100 - Mar 10 buy
120 - Mar 11 sell

Applying the wash sale rule, the guy’s basis in the stock would be $80 by the time he sold the stock at March 11. Which means his capital gain is $40 in the eyes of the IRS instead of $20 as one person would think. Do this a shytload of times like they said the guy was doing, and you have yourself a fun tax situation.

Yes the only way he gets capital gain is if those stocks go up and not down though

so either he made the money and owe the taxes or don't

they aren't telling the whole story

he could've made millions, then pocketed some money reinvested the money and lost it and only was able to get by 45k, just because that's how much eh ended up making on stocks overall in the year doesn't mean that's all he pocketed, because he can be have been small amounts everytime he sold into his bank and reinvest the rest

 

[Bubba T]

Yes the only way he gets capital gain is if those stocks go up and not down though

so either he made the money and owe the taxes or don't

they aren't telling the whole story

he could've made millions, then pocketed some money reinvested the money and lost it and only was able to get by 45k, just because that's how much eh ended up making on stocks overall in the year doesn't mean that's all he pocketed, because he can be have been small amounts everytime he sold into his bank and reinvest the rest

I agree with you that they may not be telling the whole story, but as wild as it sounds, it may not be far from the truth. I’ve heard of so many people getting messed up by the wash sale rule it’s silly. Tax law is just a bunch of iffy shyt.

 

[TOAD99]

I won’t lie I still don’t get it

so he kept day trading and they think he earned more than he really did?