I bought some stock shares and then, a couple of weeks later, realized what I wanted my long-term stock-trading strategy to be, and this stock does not fit my strategy. I bought the shares in August, and it is now October. How soon can I sell these shares without incurring the tax penalty for selling them too quickly? Do I have to hold them for a year, or is 45 days all that is required, or a different length of time?
There is no penalty for selling "too soon". There is a tax break for long term gains, and you won’t get this. However, one sure way to lose money is to worry more about the taxes than the actual investments. If you don’t want it, sell it.
There is no tax penalty for selling shares. After all, how do you think day traders operate?
If you sell the shares within one year and you make a profit on the sale, you have to pay short term capital gains tax on the profit. If you sell them after one year and make a profit, you pay long term capital gains tax on the profit, which is lower.
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There isn’t an explicit penalty for selling a stock too soon after buying however, there are two considerations: 1. Long term gains/losses for tax purposes, and 2. The possibility of a trading violation by using the proceeds of a sell before the settlement date to buy another stock.
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Business Degree and 40 years stock investing
There is no penalty for selling "too soon". There is a tax break for long term gains, and you won’t get this. However, one sure way to lose money is to worry more about the taxes than the actual investments. If you don’t want it, sell it.
References :
You can sell the shares almost immediately after buying…
Things to consider is the short term gains vs long term, short term gains are taxed are a higher rate.
The other is not to use the money from that sale until after settlement day (3 business days after the transaction) If you do your firm may put a trading violation on your acct. They wil prevent you from buying and selling until settlement (no big deal)
If you plan on doing this type of trading look into MARGIN and avoid the possible trading violation
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in the industry
There’s no penalty for selling shares. You can sell immediately after you bought it.
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