Have a Tax Question? Ask a Tax Expert
Hello, My name is***** am a Certified Financial Planning ® Professional.
The Capitals gains will depend on your individual tax bracket and how long you held the stock for. Over or under a year period. How long did you hold the stock ?
If you are trying to determine your cost basis, then you back out all associated costs such as interest, brokers fees and any other fees you paid for the margin loan.
Once you know what your total cost (interest, brokerage fees, commission, etc) was to buy the stock with the margin loan, then you can subtract that cost from the final sale price.
Once you have the final sale price your tax rate is determined by your holding period. If you held the stock for less then a year, you would pay short term capital gains, 365 plus 1 and you would pay long term capital gains.
Long-Term Capital Gains -2017
For taxpayers in the 10% or 15% Federal tax bracket--0% LTCG
For taxpayers in 25%, 28%, 33%, 35% brackets--15% LTCG
For taxpayers in 39.6% bracket--20% LTCG
Tax on unrecaptured Sec. 1250 gain--25% LTCG
Capital gain rate on collectibles--28% LTCG