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Microcap & Penny Stocks : American International Industries Inc. OTC BB Symbol EDII -- Ignore unavailable to you. Want to Upgrade?

To: Dusty Vestal who wrote (1283)	7/18/1998 11:07:00 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 4814

Dusty, In your example, your basis in 5000 shares is $1258. Therefore, each share has a basis of 1258/5000 or $.25 + a few mills for the commission. Actually you sold 1000 shares, or 20% of your initial investment. So therefore you have an investment of $250 (.25 times 1000) plus 20% of the commissions ($8) or $1.60. Therefore your basis on these 1000 shares is $251.60. You sold at 40 cents a share minus $8.00 in commissions (your example said plus, but it's actually minus unless the brokerage paid you to sell your 1000 shares). Therefore you have $400 - $8, or $392 for your sale. The taxable amount is $392 - $251.60 or $140.40. As for SureTrade not sending an end-of-the-year statement, get a different broker if you can. They have to track your buys/sales because they have to report the activity to the IRS for taxation purposes. Also, if you have a lot of trading activity and profits each quarter, you are required by law to file estimated tax payments each quarter to the IRS. Penalties for non-compliance can be hefty, but not in this small amount of your example. As for the appropriate tax rate, it depends on how long you owned the stock. There are three brackets. If you've held it less than 12 months, then it is taxed at your normal income tax rate (for most people, 28%). If you've held it for 12 months (plus one day to be sure) but less than 18 months, then your taxable rate is 28%. If you've held it 18 months (plus one day to be sure), then the taxable rate drops to 20% Hope this helps. KJC