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This is a great, we need more of such financial instruments than traditional checking account. But I'm wondering, [1] How do you handle capital gains tax, when
by ram_rar 5y ago
This is a great, we need more of such financial instruments than traditional checking account. But I'm wondering,
[1] How do you handle capital gains tax, when the user withdraws the amount from their account?
[2] How is this different from marcus/ally and thousand others, that provide money market fund accounts and money there is insured by FDIC.
- konne88 5y ago1) You will usually pay short term capital gains tax every time you spend money. Note however that your taxes will only be a fraction of your gains, not your total assets. E.g. if you have $1,000 gains in a year and pay 35% short-term capital gains tax, you will make $650 post tax. If you have $0 gains, you will also pay $0 in tax. You can configure which of your shares we will sell first. If you set this to Tax-Sensitive, we will sell shares with a low tax burden first, so if you have a greater inflow into your account than outflow, all the shares with a high tax burden will never be touched and they will eventually be classified as long-term capital gains. 2) Money market funds only allow you to invest in low risk/low reward securities. We allow you to invest a much broader set of securities (including bonds, stock, ETFs, etc).