Taxes on Stocks and Options Explained (Complete Breakdown)

What is the tax treatment for stocks and options trading?

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Watch and listen to Toby Mathis, Esq. as he breaks down taxes for stocks, options, and cryptocurrencies.

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Toby Mathis, Esq. is the best-selling author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Toby is a tax attorney and founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. Learn more at

The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice. of the information contained herein without seeking professional legal advice.

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27 thoughts on “Taxes on Stocks and Options Explained (Complete Breakdown)”

  1. I own 300 shares of a stock for over a year and buy 1 option contract of the same stock. I then exercise that option at two months giving me 400 total shares. If I sell any of the original 300 shares will I be taxed at short-term gains?

  2. This shit should be illegal! If only The Proletariat weren’t so lazy. And taxable. And educated. Or “edu-matriculated”, which is what is happening to him, and he would know this, providing he ever learned how to read.

  3. This shit is absolutely absurd.
    “We’ll just take some of this stuff you made, and put it over here. Bcuz we told these guys over here that we said we could, bcuz we told you so, and you still say ok!”! Cuz hardly any of these ppl have ever had to work hard for a living. Now don’t that seem odd, but oh so terribly likely. Ppl being so conservative and all…

  4. Toby. I have a great problem – a large short term capital gain due to all the options premium I collect over the course of a year. Other than taking capital loses on other positions, what can I do to lower my tax bill to the government???

  5. Hey Toby. Thanks for the good info. I have a question and an example for my questions. Lets say I sold a put for 200$ and in couple of days it is 100$. I decide to buy it back. Which amount am I taxed?What is my short term gain?

  6. So now if the taxable event occurs when my option contract expires & i made a profit, but i dont cash out & i dont transfer those funds to my bank account & i just keep it in my portfolio, do i still have to come out of my pocket & pay those taxes at the end of the year, even though i didnt cash out or put it in my bank account ?

  7. I formed an LLC for my trading business. If I contribute some stocks I own outside of the LLC, let’s say 500 shares of Apple I bought at $195 a share but at the time of me transferring my Apple shares to an LLC as contributions the stock is $100. The LLC will continue to hold the shares for sometime but the stock price is still lower that what I paid for it. What will be the cost basis of the shares for tax purposes when the LLC sells the shares? Will the loss pass-through to me to offset my high personal income tax?

  8. if your making good money throughout the year on capital gains will 1040 es be required to make payments on gains during the year or can you just wait to pay the irs the full amount when taxes are filed without paying the 25% penalty for owing over 1000?

  9. I made $50k in profit on stocks in 2021. I had to pay taxes on the $50k gains. If I lose $30k on stock sale this year, can I carry back the losses of $30k to last year? Personal tax return and not a business.

  10. Toby. Every time I type a tax question into the search bar for YouTube I’m always hopeful that you’ve put out a video on it… and I’ve never been disappointed. You answer every question like you’ve heard every question before. Your channel is the best. Thank you for sharing your knowledge

  11. Great Video. I sell credit spreads in an after tax brokerage account. I recently had my option excerised. However, my short put position off set the excerised option. the amount of the stock value was $+336,000 (credit) put was $-335,450 (debt). Will my federal income be reported as my job income plus $336,000?

  12. Could you do a video on crypto tax ramifications. day trading vs long-term holding. When is it considered a capital gain or loss, when you sell or when you withdraw it from your online account (I've heard both). Any concerns or issues to watch out for?

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