ShmoopTube

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Finance a la shmoop what is capital gains tax? alright people you've invested

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your hard-earned savings from working 72 hours a week all year you put 10 grand

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to work seven years ago in buying Heinz ketchup stock at 50 bucks a share

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200 shares then this year along comes Warren Buffett and Berkshire Hathaway to [Warren and Berkshire appear]

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confirm what a brilliant investor you were and they buy for all cash the

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company Heinz ketchup for $200 a share you've made four times your money in

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seven years nice work well you have a gain of 150 bucks a share which you are

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gonna fully realize like you'll realize that capital gain in the form of

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receiving cash like oh I realize I have cash in my bank account yay me!

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so all this was so good such a nice day until you realize that you live in a [Woman frollocking in a meadow]

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blue state with massive taxes and that you'll now give back about a third or

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more of your investment gains that is you invested 10 grand it became 40 grand

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the old-fashioned way you had 30 grand of profits and now uncle sam says i want [Uncle Sam demanding I want your cash]

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your cash and you now pay about 10 grand roughly a third of it in taxes of

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your gains of that 30 grand back to Uncle S, sadly you are paying back in

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taxes about the same amount you invested in the first place yep lots of hard work

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lots of taxes how's that feel?

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