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

[Kurt off them percs]

robinhood needs a easymode

Compared to other app it is easy mode

 

[Master Teacher]

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.

They qoute Mecane from Citadel in the article

Citadal is the shady company who are shorting all the retail stocks

they trying to scare people

 

[AtomicUse]

He traded a lot of popular stocks, I’m guessing GameStop, AMC, etc., while they were rising exponentially. The IRS rule says you can’t sell your stock at a loss and then immediately buy it again and still record the loss on your taxes.

Basically, if you bought 1 stock for $100 on January 1, sold that same stock on February 15 for $80, and then bought that same stock again at $60 on February 20th, you cannot record the $20 loss on February 15th on your taxes. Your cost basis goes back to $80.

This kid just bought and sold a lot, thinking he was making a lot of money, but didn’t think about the tax impact.

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?

Basically every time he bought a stock and made a winning sale they counted it, but every time he bought a stock and sold at a loss they ignored it. He was day trading and that is the risk involved.

I think I’ve maybe done 50 day trades total in a year, but this guy was doing 10-50 trades off of a $30k base ,EVERY DAY, for an entire year.

How did he ever get any real work done?

 

[SleezyBigSlim]

This kinda of tax penalty discourages day trading like a mothafucca I'm pretty sure that's what the idea behind this was.

 

[SleezyBigSlim]

I think crypto brehs are safe

This tax rule doesn't apply to crypto does it? I want to day trade bitcoin as it's more profitable then day trading stocks.

 

[Ohnoits]

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

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.

This is the truth I made so much money on call options and selling--but I also have a very high income. Its not a big deal to me if I have to pay a couple thousand in tax etc. However, I don't like having to follow the rules necessary and track taxes for day trading I have enough to deal with in my day to day life so I moved to investing in stocks that are solid and about the future. I don't worry about parking my money in TSLA, APPL, etc I really don't care if it swings from 533-670 dollars because in a few years when I need it I think it will be 800-900.

I'm not worried about it. Leave the money alone for a few years, buy some growth companies and walk away. People getting involved in these get rich quick schemes who can't afford to pay when the tax man comes are going to be in trouble.

 

[SleezyBigSlim]

This is the truth I made so much money on call options and selling--but I also have a very high income. Its not a big deal to me if I have to pay a couple thousand in tax etc. However, I don't like having to follow the rules necessary and track taxes for day trading I have enough to deal with in my day to day life so I moved to investing in stocks that are solid and about the future. I don't worry about parking my money in TSLA, APPL, etc I really don't care if it swings from 533-670 dollars because in a few years when I need it I think it will be 800-900.

I'm not worried about it. Leave the money alone for a few years, buy some growth companies and walk away. People getting involved in these get rich quick schemes who can't afford to pay when the tax man comes are going to be in trouble.

These tax rules apply to options too?

 

[Ohnoits]

These tax rules apply to options too?

Yes an option call in a stock is opening and closing a position.

So you would have to pay tax on that...I also understand that if you own a stock and sell it and then you buy an option within 31 days that also applies to the rule...

Anyway I am not a tax professional but I would say just expect to pay taxes, and before you continue day trading go talk to a CPA about it...

EDIT - in fact, I suspect that is how he got such a high tax bill, if he was opening and closing contracts with all of that money...he thought he was ahead not realizing he would have to pay for that...

 

[Art Barr]

Stocks are for people with pennies to trade to make wealth.
Stop investing in their wack products and companies.

They do not make shyt great or good worth a purchase of a piece of their company.


Art Barr

 

[EndDomination]

Something is not adding up about this shyt.

It's in the tax code. 26 US §1061 - it'd be much easier to make money quickly if you sell stock at a loss, claim the loss as taxable, and then repurchase the stock (probably while its rebounding) - in big enough volumes it's skating around capital gains taxes.

Someone explain it to me like I'm 5. Where did he get 45million?

That's the amount he traded between shares of companies (in total), not the amount he actually had. Like if I moved $100 back and forth between 10 people (or shares of those 10 people) I've made $1000 in total trades.

 

[EndDomination]

I must be dumb. That sentence sounds like Spanish. What the fukk does that mean?

You can use your losses to lower your taxable income basically.

 

[EndDomination]

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

This is some of the worst advice I've seen about taxes
An offer in compromise is legit - but the rest of this

 

[Actually6Foot3]

They're not getting that money lmfao

he wont be the last. shyt im probably somewhere in here too but my tax bill would be in the hundreds LOL def didn't trade anywhere near this amount.


That said...systemis rigged for the big players. Gamestop saga not over, this is a whole new chapter.

 

[SleezyBigSlim]

Yes an option call in a stock is opening and closing a position.

So you would have to pay tax on that...I also understand that if you own a stock and sell it and then you buy an option within 31 days that also applies to the rule...

Anyway I am not a tax professional but I would say just expect to pay taxes, and before you continue day trading go talk to a CPA about it...

EDIT - in fact, I suspect that is how he got such a high tax bill, if he was opening and closing contracts with all of that money...he thought he was ahead not realizing he would have to pay for that...

Does this apply when day trading bitcoin also?

 

[King Poetic]

Suicide