[quote=Wookie;1149607]I'll give you how it would work on my etrade account.
You put $1,000 into said stock. cost $9.99.
You sell $1,200 of said stock. cost $9.99
You have $200.00
Minus $19.98
Remaining $180.02
You're going to pay taxes on $100.00 [Quote]
Just a little nit: I think for tax purposes your cost base would be 1009.99 and your proceeds 1190.01. Therefore, your Gain would be 180.02, 1/2 is taxable = 90.01. Therefore tax payable is your tax rate mutiplied by 90.01.
Just be careful with penny stocks....if you start out with a few wins you get a little cocky and bet too much....as has been mentioned early in the thread, most of them go to 0. Also pay attention to the liquidity (trading volume), because you may have trouble getting out of a position that you manage to get into.
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