query: Can I sell a stock immediately?

positive: You have no guarantees. The stock may last have traded at $100 (so, the market price is $100), but is currently in free-fall and nobody else will be willing to buy it for any more than $80. Or heck, maybe nobody will be willing to buy it at all, at any price. Or maybe trading on this stock will be halted. Remember, the market price is just what the stock last traded at. If you put in a 'market order', you are ordering your broker to sell at the best available current price. Assuming someone's willing to buy your stock, that means you'll sell it. But if it last traded at $100, this doesn't guarantee you'll sell at anything close to that.

positive: In order to see whether you can buy or sell some given quantity of a stock at the current bid price, you need a counterparty (a buyer) who is willing to buy the number of stocks you are wishing to offload. To see whether such a counterparty exists, you can look at the stock's order book, or level two feed. The order book shows all the people who have placed buy or sell orders, the price they are willing to pay, and the quantity they demand at that price. Here is the order book from earlier this morning for the British pharmaceutical company, GlaxoSmithKline PLC.  Let's start by looking at the left-hand blue part of the book, beneath the yellow strip. This is called the Buy side. The book is sorted with the highest price at the top, because this is the best price that a seller can presently obtain. If several buyers bid at the same price, then the oldest entry on the book takes precedence. You can see we have five buyers each willing to pay 1543.0 p (that's 1543 British pence, or £15.43) per share. Therefore the current bid price for this instrument is 1543.0. The first buyer wants 175 shares, the next, 300, and so on. The total volume that is demanded at 1543.0p is 2435 shares. This information is summarized on the yellow strip: 5 buyers, total volume of 2435, at 1543.0. These are all buyers who want to buy right now and the exchange will make the trade happen immediately if you put in a sell order for 1543.0 p or less. If you want to sell 2435 shares or fewer, you are good to go. The important thing to note is that once you sell these bidders a total of 2435 shares, then their orders are fulfilled and they will be removed from the order book. At this point, the next bidder is promoted up the book; but his price is 1542.5, 0.5 p lower than before. Absent any further changes to the order book, the bid price will decrease to 1542.5 p. This makes sense because you are selling a lot of shares so you'd expect the market price to be depressed. This information will be disseminated to the level one feed and the level one graph of the stock price will be updated. Thus if you have more than 2435 shares to sell, you cannot expect to execute your order at the bid price in one go. Of course, the more shares you are trying to get rid of, the further down the buy side you will have to go. In reality for a highly liquid stock as this, the order book receives many amendments per second and it is unlikely that your trade would make much difference. On the right hand side of the display you can see the recent trades: these are the times the trades were done (or notified to the exchange), the price of the trade, the volume and the trade type (AT means automatic trade).  GlaxoSmithKline is a highly liquid stock with many willing buyers and sellers. But some stocks are less liquid. In order to enable traders to find a counterparty at short notice, exchanges often require less liquid stocks to have market makers. A market maker places buy and sell orders simultaneously, with a spread between the two prices so that they can profit from each transaction. For instance Diurnal Group PLC has had no trades today and no quotes. It has a more complicated order book, enabling both ordinary buyers and sellers to list if they wish, but market makers are separated out at the top. Here you can see that three market makers are providing liquidity on this stock, Peel Hunt (PEEL), Numis (NUMS) and Winterflood (WINS). They have a very unpalatable spread of over 5% between their bid and offer prices. Further in each case the sum total that they are willing to trade is 3000 shares. If you have more than three thousand Dirunal Group shares to sell, you would have to wait for the market makers to come back with a new quote after you'd sold the first 3000.

positive: If you place a market order, you are guaranteed to sell your stock unless the stock is in a trading halt. A market order does not guarantee the price you sell the stock at.  If you place a market order, even if the stock is very illiquid a market maker will guarantee a market, but will not guarantee a price.

positive: You can*, if the market is open, in a normal trading phase (no auction phase), works, and there is an existing bid or offer on the product you want to trade, at the time the market learns of your order. Keep in mind there are 2 prices: bid and offer. If the current bid and current offer were the same, it would immediately result in a trade, and thus the bid and offer are no longer the same. Market Makers are paid / given lower fees in order to maintain buy and sell prices (called quotes) at most times. These conditions are usually all true, but commonly fail for these reasons: Most markets have an order type of market order that says buy/sell at any price. There are still sanity checks put in place on the price, with the exact rules for valid prices depending on the stock, so unless it's a penny stock you won't suddenly pay ten times a stock's value. *The amount you can buy sell is limited by the quantity that exists on the bid and offer. If there is a bid or offer, the quantity is always at least 1.

positive: You can always trade at bid or ask price (depending if you are selling or buying). Market price is the price the last transaction was executed at so you may not be able to get that. If your order is large then you may not even be able to get bid/ask but should look at the depth of the order book (ie what prices are other market participants asking for and what is the size of their order). Usually only fast traders will trade at bid/ask, those who believe the price move is imminent. If you are a long term trader you can often get better than bid or ask by placing a limit order and waiting until a market participant takes your offer.

positive: Yes you can, provided if buyers are available.  Normally high liquidty stocks can be sold at market prices a little higher or lower.

negative: Sounds like an illiquid option, if there are actually some bidders, market makers, then sell the option at market price (market sell order). If there are not market makers then place a really low limit sell order so that you can sit at the ask in the order book. A lot of time there is off-book liquidity, so there may be a party looking for buy liquidity. You can also exercise the option to book the loss (immediately selling the shares when they get delivered to you), if this is an American style option. But if the option is worthless then it is probably significantly underwater, and you'd end up losing a lot more as you'd buy the stock at the strike price but only be able to sell at its current market value. The loss could also be increased further if there are even MORE liquidity issues in the stock.

negative: One key piece missing from your theory is the bid/ask spread. If you buy a stock for $10, you usually can't immediately turn around and sell it for $10. You can only sell it for whatever someone is willing to pay for it.  So virtually any random investment (stocks, bonds, forex, whatever) immediately loses a small amount of value, and over the long run you will almost certainly lose money if you buy/sell at random.

negative: The role of the market maker is to make sure there is a bid and ask on a particular stock.  That's it.  The market maker ensures that there is a price at which you can buy and a price at which you can sell immediately, but these are not necessarily the best prices.  The majority of trades do not involve market makers and occur between two third parties. Whoever said a market order trades with the market maker is thinking of the way stock markets were years ago, not the way they are now. Market orders are supposed to execute immediately and at one time trading with the market makers was the method for executing immediately. If you issue a market order today, it executes with the best available limit order(s) on the other wide of the trade.  This may or may not involve a party that identifies as a market maker.

negative: To short a stock you actually borrow shares and sell them. The shorter gets the money from selling immediately, and pays interest for the share he borrows until he covers the short. The amount of interest varies depending on the stock. It's typically under 1% a year for large cap stocks, but can be 20% or more for small, illiquid, or heavily shorted stocks. In this scam only a few people own the shares that are lent to shorters, so they essentially have a monopoly and can set really high borrow costs. The shorter probably assumes that a pump-and-dump will crash quickly, so wouldn't mind paying a high borrow cost.

negative: I guess the answer lies in your tax jurisdiction (different countries tax capital gains and income differently) and your particular tax situation. If the price of the stock goes up or down between when you buy and sell then this counts for tax purposes as a capital gain or loss. If you receive a dividend then this counts as income.  So, for instance, if you pay tax on income but not on capital gains (or perhaps at a lower rate on capital gains) then it would pay you to sell immediately before the stock goes ex-dividend and buy back immediately after thereby making a capital gain instead of receiving income.

negative: You also need to remember that stock options usually become valueless if not exercised while an employee of the company.  So if there is any chance that you will leave the company before an IPO, the effective value of the stock options is zero.  That is the safest and least risky valuation of the stock options.   With a Google or Facebook, stock options can be exercised and immediately sold, as they are publicly traded.  In fact, they may give stock grants where you sell part of the grant to pay tax withholding.  You can then sell the remainder of the grant for money at any time, even after you leave the company.  You only need the option/grant to vest to take advantage of it.  Valuing these at face value (current stock price) makes sense.  That's at least a reasonable guess of future value.   If you are absolutely sure that you will stay with the company until the IPO, then valuing the stock based on earnings can make sense.  A ten million dollar profit can justify a hundred million dollar IPO market capitalization easily.  Divide that by the number of shares outstanding and multiply by how many you get.  If anything, that gives you a conservative estimate.   I would still favor the big company offers though.  As I said, they are immediately tradeable while this offer is effectively contingent on the IPO.  If you leave before then, you get nothing.  If they delay the IPO, you're stuck.  You can't leave the company until then without sacrificing that portion of your compensation.  That seems a big commitment to make.

negative: You're talking about ESPP? For ESPP it makes sense to utilize the most the company allows, i.e.: in your case - 15% of the paycheck (if you can afford deferring that much, I assume you can). When the stocks are purchased, I would sell them immediately, not hold. This way you have ~10% premium as your income (pretty much guaranteed, unless the stock falls significantly on the very same day), and almost no exposure. This sums up to be a nice 1.5% yearly guaranteed bonus, on top of any other compensation. As to keeping the stocks, this depends on how much you believe in your company and expect the stocks to appreciate. Being employed and dependent on the company with your salary, I'd avoid investing in your company, as you're invested in it deeply as it is.

negative: You should sell all your stock immediately and reinvest the money in index funds. As of right now you're competing against prop trading shops, multinational banks, and the like, who probably know a teensy bit more about that particular stock than you do. I'm sorry, any other advice is missing the point that you shouldn't be picking stocks in the first place.

negative: "Mathematically it's arbitrary - you could just as easily use the bid or the midpoint as the denominator, so long as you're consistent when comparing securities.  So there's not a fundamental reason to use the ask.  The best argument I can come up with is that most analysis is done from the buy side, so looking at liquidity costs (meaning how much does the value drop instantaneously purely because of the bid-ask spread) when you buy a security would be more relevant by using the ask (purchase price) as the basis. Meaning, if a stock has a bid-ask range of $95-$100, if you buy the stock at $100 (the ask), you immediately ""lose"" 5% (5/100) of its value since you can only sell it for $95."

negative: To try to answer the three explicit questions: Every share of stock is treated proportionately: each share is assigned the same dollar amount of investment (1/176th part of the contribution in the example), and has the same discount amount (15% of $20 or $25, depending on when you sell, usually). So if you immediately sell 120 shares at $25, you have taxable income on the gain for those shares (120*($25-$17)). Either selling immediately or holding for the long term period (12-18 mo) can be advantageous, just in different ways.   Selling immediately avoids a risk of a decline in the price of the stock, and allows you to invest elsewhere and earn income on the proceeds for the next 12-18 months that you would not otherwise have had.  The downside is that all of your gain ($25-$17 per share) is taxed as ordinary income.   Holding for the full period is advantageous in that only the discount (15% of $20 or $25) will be taxed as ordinary income and the rest of the gain (sell price minus $20 or $25) will be taxed at long-term capital gain tax rates, which generally are lower than ordinary rates (all taxes are due in the year you do sell).  The catch is you will sell at different price, higher or lower, and thus have a risk of loss (or gain). You will never be (Federally) double taxed in any scenario.  The $3000 you put in will not be taxed after all is sold, as it is a return of your capital investment.  All money you receive in excess of the $3000 will be taxed, in all scenarios, just potentially at different rates, ordinary or capital gain.  (All this ignores AMT considerations, which you likely are not subject to.)

negative: "You may look into covered calls.  In short, selling the option instead of buying it ... playing the house.   One can do this on the ""buying side"" too, e.g. let's say you like company XYZ.  If you sell the put, and it goes up, you make money.  If XYZ goes down by expiration, you still made the money on the put, and now own the stock - the one you like, at a lower price.  Now, you can immediately sell calls on XYZ.  If it doesn't go up, you make money.  If it does goes up, you get called out, and you make even more money (probably selling the call a little above current price, or where it was ""put"" to you at). The greatest risk is very large declines, and so one needs to do some research on the company to see if they are decent -- e.g. have good earnings, not over-valued P/E, etc.  For larger declines, one has to sell the call further out.  Note there are now stocks that have weekly options as well as monthly options.  You just have to calculate the rate of return you will get, realizing that underneath the first put, you need enough money available should the stock be ""put"" to you.   An additional, associated strategy, is starting by selling the put at a higher than current market limit price.  Then, over a couple days, generally lowering the limit, if it isn't reached in the stock's fluctuation.  I.e. if the stock drops in the next few days, you might sell the put on a dip.   Same deal if the stock finally is ""put"" to you.  Then you can start by selling the call at a higher limit price, gradually bringing it down if you aren't successful -- i.e. the stock doesn't reach it on an upswing. My friend is highly successful with this strategy. Good luck"

negative: "If the stock is below its purchase price, there is no way to exit the position immediately without taking losses. Since presumably you had Good Reasons for buying that stock that haven't changed overnight, what you should probably do is just hold it and wait for the stock to come back up. Otherwise you're putting yourself into an ongoing pattern of ""buy high, sell low"", which is precisely what you don't want to do. If you actually agree with the market that you made a mistake and believe that the stock will not recover any part of the loss quickly (and indeed will continue going down), you could sell immediately and take your losses rather than waiting and possibly taking more losses. Of course if the stock DOES recover you've made the wrong bet. There are conditions under which the pros will use futures to buffer a swing. But that's essentially a side bet, and what it saves you has to be balanced against what it costs you and how certain you are that you NOW can predict the stock's motion. This whole thing is one of many reasons individuals are encouraged to work with index funds, and to buy-and-hold, rather than playing with individual stocks. It is essentially impossible to reliably ""time the market"", so all you can do is research a stock to death before making a bet on it. Much easier, and safer, to have your money riding on the market as a whole so the behavior of any one stock doesn't throw you into a panic. If you can't deal with the fact that stocks go down as well as up, you probably shouldn't be in the market."

negative: "Usually insiders are in a better position than you to understand their business, but that doesn't mean they will know the future with perfect accuracy. Sometimes they are wrong, sometimes life events force them to liquidate an otherwise promising investment, sometimes their minds change. So while it is indeed valuable information, as everything in fundamental analysis it must be taken with a grain of salt. Automatic Sell I think these refer to how the sell occurred. Often the employees don't get actual shares but options or warrants that can be converted to shares. Or there may be special predetermined arrangements regarding when and how the shares may be traded. Since the decision to sell here has nothing to do with the prospects of the business, but has to do with the personal situation of the employee, it's not quite the same as outright selling due to market concerns. Some people, for instance, are not interested in holding stock. Part of their compensation is given in stock, so they immediately sell the stock to avoid the headache of watching an investment. This obviously doesn't indicate that they expect the company will go south. I think automatic sell refers to these sorts of situations, but your broker should provide a more detailed definition. Disposition (Non Open Market) These days people trade through a broker, but there's nothing stopping you from taking the physical shares and giving them to someone in exchange for say a stack of cash. With a broker, you only ""sell"" without considering who is buying. The broker then finds buyers for you according to their own system. If selling without a broker you can also be choosy with who is buying, and it's not like anybody can just call up the CEO and ask to buy some stock, so it's a non-open market. Ultimately though it's still the insider selling. Just on a different exchange. So I would treat this as any insider sell - if they are selling, they may be expecting the stock to become less valuable. indirect ownership I think this refers to owning an entity that in turn owns the asset. For instance CEO of XYZ owns stock in ACME, but ACME holds shares of XYZ. This is a somewhat complicated situation, it comes down to whether you think they sold ACME because of the exposure to XYZ or because of some other risk that applies only to ACME and not XYZ. Generally speaking, I don't think you would find a rule like ""if insider transactions of so and so kinds > X then buy"" that provides guaranteed success. If such a rule was possible it would have been exploited already by the professionals. The more sensible option is to consider all data available to you and try to make a holistic evaluation. All of these insider activities can be bullish or bearish depending on many other factors."

negative: "I've bought ISO stock over they years -- in NYSE traded companies.  Every time I've done so, they've done what's called ""sell-to-cover"".  And the gubmint treats the difference between FMV and purchase price as if it's part of your salary.  And for me, they've sold some stock extra to pay estimated taxes. So, if I got this right...  20,000 shares at $3 costs you 60,000 to buy them.  In my sell-to-cover at 5 scenario: did I get that right?  Keeping only 4,000 shares out of 20,000 doesn't feel right.  Maybe because I've always sold at a much ratio between strike price and FMV. Note I made some assumptions:  first is that the company will sell some of the stock to pay the taxes for you.  Second is your marginal tax rate.  Before you do anything check these. Is there some reason to exercise immediately?  I'd wait, personally."

negative: "Alrighty.  So your question is, how confident are people that FB stock will close above a certain price at a certain time.  A ""call"" option contract allows you to buy shares in the future at a certain price.  FB calls are available for March of 2013.  The number in the ""strike"" column is the price you can buy FB stock at on the given date. Let's take the ""33.00"" strike.  This allows you to buy FB shares at $33 each next March.  If at that time it turns out they're worth $50 each, you can buy them at $33, then immediately sell them on the open market for $50, making money.  The person selling you the option knows that there's a chance the price will be above $33 in March, so he's going to charge you a few bucks to cover that possibility.  In this case, he's charging you $5.30 (as of me writing this).  So, you can have the option to buy FB shares at $33 each for $5.30.  This means the guy selling you the option is reasonably confident that in March, FB stock will be at or under $38.50, otherwise he'd lose money when you exercised the option.    Therefore, $38.50 is the option market's best guess as to the highest FB stock will be going for in March."

negative: "Many people assume that if the price of something is $10 and they have 1,000 of that thing, they should expect to be able to sell them for something around $10,000.  Such an assumption may hold much of the time, but it doesn't always.  Worse, the cases where it fails to hold are often those where it would be relied upon most heavily.  Such an assumption should thus be considered dangerous. In a liquid market, the quantity of a something that people would be willing to buy at something close to the market price will be large relative to the quantity that people would seek to sell in the short term.  If at some moment in time one person in the market was willing to immediately buy 500 shares at $9.98 and another was willing to immediately buy 750 at $9.97, someone seeking to sell 1,000 shares could immediately receive $997.50 for them (selling 500 to the first person and 500 to the second, who would then be ready to buy 250 more from the first person who was willing to sell for $9.97).  Such behavior would be in line with what many people's assumptions. In an illiquid market, however, the quantity of something that people would be willing to buy near market price could be surprisingly low.  This is more often a problem in the marketplace of things like collectibles than of stocks, but the same thing can happen in the stock market.  If there's one potential buyer for a stock who thinks it's overpriced but has potential and would be worth $9.50, but that person only has $950 to spend, and nobody else thinks the stock would be worth more than $0.02/share, then until people sold a total of 100 shares the price would be $9.50, but after that the price would drop instantly to $0.02.  There would be no ""cushioning"" of the fall.  If the person with 1,000 shares was first in line, he'd get to sell 100 shares for $950 to the aforementioned seller, but would be unable to get more than $18 for the remaining 900. A major danger with markets is that markets which are perceived as liquid attract people to the buying side, while those which are seen as illiquid repel people.  The danger in the latter is obvious (having people flee a seemingly-illiquid market will reduce its liquidity further) but the former is just as bad.  Having people flock to a market because of its perceived liquidity will increase its liquidity, but can also create a ""false price floor"", causing demand to appear much stronger than it actually is.  Unless real demand increases to match the false price floor, the people who buy at the higher price will never be able to recoup their investment."

negative: You can't sell options if you don't have margin account (except covered call).  You can't trade futures if you don't have margin account.  Everything is immediate when you have margin account. (Including stocks) Margin account is not subject to freeriding rules, but is subject to Pattern Day Trader rules.

negative: At any point of time, buyer wants to purchase a stock at lesser price and seller wants to sell the stock at a higher price.  Let's consider this scenario  Company XYZ is trading at 100$, as stated above buyer wants to purchase at lower price and seller at higher price, this information will be available in Market depth, let's consider there are 5 buyers and 5 sellers, below are the details of their orders Buyers List Sellers List Highest order in buyers list will contain the bid price and bid quantity, Lowest order in Sellers list will contain the offer price and offer quantity. Now, if I want to buy 50 Stocks of company XYZ, need to place an order first, it can be either limit or Market. Limit Order : In this order, I will mention the price(buy price) at which I wish to buy, if there is any seller selling the stock less than or equal to price I have mentioned, then the order will be executed else it will be added to buyers list Market Order : In this order, I will not mention the price, if I wish to purchase 50 Stocks, then it will find the lowest offer price and buy stocks, in our case it will be 101. if I wish to purchase 200 Stocks, then it will find the lowest offer price and buy stocks, in our case it will be 2 transactions, since entire request cannot be accommodated in single order Usually the volume(Ask Volume and Offer Volume) being displayed are all Limit orders and not Market orders, Market orders are executed immediately. This is just an example, However several transactions are executed within a second, hence we will get to know the exact value only after the order is completed(executed)

negative: The obvious thing would happen. 10 shares change owner at the price of $100. A partially still open selling order would remain. Market orders without limits means to buy or sell at the best possible or current price. However, this is not very realistic. Usually there is a spread between the bid and the ask price and the reason is that market makers are acting in between. They would immediately exploit this situation, for example, by placing appropriately limited orders. Orders without limits are not advisable for stocks with low trading activity. Would you buy or sell stuff without caring for the price?

negative: I would not hold any company stock for the company that provides your income.   This is a too many eggs in one basket kind of problem. With a discounted stock purchase plan, I would buy the shares at a 10% discount and immediately resell for a profit.   If the company prevents you from immediately reselling, I  don't know if I would invest. The risk is too great that you'll see your job lost and your 401k/investments emptied due to a single cause.

negative: The trader has purchased 1095 options, each of which is a contract which entitles him to sell 100 shares of Cisco stock for $16 a share. He paid $71 for each contract (71 cents a share x 100) which is roughly $78k total. He will get $109,500 for each dollar below $16 Cisco's stock is when he exercises it (he can buy the stock for the going rate and then sell it for $16 immediately), or he can sell the option itself to someone else for a similar gain (usually a little more, especially if the option has a long time until it expires). If the option expires when the stock is over $16/share, he gets nothing; i.e. the original $78k is lost. For reference, Cisco's stock was trading at $17.14/share as of market close on March 18, 2010. The share price had recently been boosted by the recent news that they would be paying a quarterly dividend. It has been heading mostly downward since February 9, after they announced that they're not expecting profits to be as good as the analysts thought they would be: they claim that people aren't buying too much networking equipment just now, and they're also facing mounting competition from the likes of HP and Juniper for switches, and Aruba / HP / Motorola for wireless devices. They may lose market share or need to cut prices, hurting profits. Either way, there's certainly a real possibility of their stock going below $16 in the next few months, so people are willing to pay for those options. (Disclosure: I work for Aruba, who competes with Cisco. I also own shares of Aruba, possess assorted stock options and similar equity grants, and participate in the employee stock purchase program.  I also own shares in Cisco indirectly through various mutual funds and ETFs.)

negative: "So, the term ""ready market"" simply means that a market exists in which there are legitimate buy/sell offers, meaning there are investors willing to own or trade in the security. A ""spot market"" means that the security/commodity is being delivered immediately, rather at some predetermined date in the future (hence the term ""futures market"").  So if you buy oil on the spot market, you'd better be prepared to take immediate delivery, where as when you buy a futures contract, the transaction doesn't happen until some later date.  The advantage for futures contract sellers is the ability to lock in the price of what they're selling as a hedge against the possibility of a price drop between now and when they can/will deliver the commodity.  In other words, a farmer can pre-sell his grain at a set price for some future delivery date so he can know what he's going to get regardless of the price of grain at the time he delivers it.  The downside to the farmer is that if grain prices rise higher than what he sold them for as futures contracts then he loses that additional money.  That's the advantage to the buyer, who expects the price to rise so he can resell what he bought from the farmer at a profit. When you trade on margin, you're basically borrowing the money to make a trade, whether you're trading long (buying) or short (selling) on a security.  It isn't uncommon for traders to pledge securities they already own as collateral for a margin account, and if they are unable to cover a margin call then those securities can be liquidated or confiscated to satisfy the debt.  There still may even be a balance due after such a liquidation if the pledged securities don't cover the margin call. Most of the time you pay a fee (or interest rate) on whatever you borrow on margin, just like taking out a bank loan, so if you're going to trade on margin, you have to include those costs in your calculations as to what you need to earn from your investment to make a profit. When I short trade, I'm selling something I don't own in the expectation I can buy it back later at a lower price and keep the difference.  For instance, if I think Apple shares are going to take a steep drop at some point soon, I can short them.  So imagine I short-sell 1000 shares of AAPL at the current price of $112.  That means my brokerage account is credited with the proceeds of the sale ($112,000), and I now owe my broker 1000 shares of AAPL stock.  If the stock drops to $100 and I ""cover my short"" (buy the shares back to repay the 1000 I borrowed) then I pay $100,000 for them and give them to my broker.  I keep the difference ($12,000) between what I sold them for and what I paid to buy them back, minus any brokerage fees and fees the broker may charge me for short-selling. In conclusion, a margin trade is using someone else's money to make a trade, whether it's to buy more or to sell short.  A short trade is selling shares I don't even own because I think I can make money in the process. I hope this helps."

negative: "He's been doing fine for himself. He got Tesla to bail out bankrupt Solar City, remember?   And some CEOs ""pledge"" stock for loans with then immediately sold short by his ""lender"" to hedge the position, allowing said CEO to profit but never have to sell a share himself on the record.  Not that his holiness would ever do such a thing of course."

negative: The market is not stupid. It realises that a company is worth less after paying out dividends than before paying them. (It's obvious, since that company has just given out part of its earnings.) So after a company pays out dividends, its stock price normally drops approximately by the amount paid. Therefore if you buy, get the dividend, and immediately sell, under normal conditions you won't make any profit.

negative: Because buying at discount provides a considerable safety of margin -- it increases the likelihood of profiting. The margin serves to cushion future adverse price movement. Why is so much effort made to get a small percentage off an   investment, if one is then willing to let the investment drop another   20% or more with the reason of being in it for the long term? Nobody can predict the stock price. Now if a long term investor happens to buy some stocks and the market crashes the next day, he could afford to wait for the stock prices to bounce back. Why should he sells immediately to incur a definite loss, should he has confidence in the underlying companies to recover eventually? One can choose to buy wisely, but the market fluctuation is out of his/her control. Wouldn't you agree that he/she should spend much efforts on something that can be controlled?

negative: It might go down a bit, or it might not. That is nearly impossible to predict, as the relative volumes are unknown, and the exact procedure is also unknown (they might do the selling over a longer period, or as a buy back, or immediately, or...) However, why would you want to wait at all? It is generally not a great idea to put your savings into the company you work for ('all eggs in one basket' - when it goes down, you lose your job and your savings), so the best approach is to pick a good day in the next weeks and sell the stock and invest into something more neutral.

negative: "He didn't sell in the ""normal"" way that most people think of when they hear the term ""sell."" He engaged in a (perfectly legitimate) technique known as short selling, in which he borrows shares from his broker and sells them immediately. He's betting that the price of the stock will drop so he can buy them back at a lower price to return the borrowed shares back to his broker. He gets to pocket the difference. He had about $37,000 of cash in his account. Since he borrowed ~8400 shares and sold them immediately at $2/share, he got $16,800 in cash and owed his broker 8400 shares. So, his net purchasing power at the time of the short sale was $37,000 + $16,800 - 4800 shares * $2/share. As the price of the stock changes, his purchasing power will change according to this equation. He's allowed to continue to borrow these 8400 shares as long as his purchasing power remains above 0. That is, the broker requires him to have enough cash on hand to buy back all of his borrowed shares at any given moment. If his purchasing power ever goes negative, he'll be subject to a margin call: the broker will make him either deposit cash into his account or close his positions (sell long positions or buy back short positions) until it's positive again. The stock jumped up to $13.85 the next morning before the market opened (during ""before-hours"" trading). His purchasing power at that time was $37,000 + $16,800 - 8400 shares * $13.85/share = -$62,540. Since his purchasing power was negative, he was subject to a margin call. By the time he got out, he had to pay $17.50/share to buy back the 8400 shares that he borrowed, making his purchasing power -$101,600. This $101,600 was money that he borrowed from his broker to buy back the shares to fulfill his margin call. His huge loss was from borrowing shares from his broker. Note that his maximum potential loss is unlimited, since there is no limit to how much a stock can grow. Evidently, he failed to grasp the most important concept of short selling, which is that he's borrowing stock from his broker and he's obligated to give that stock back whenever his broker wants, no matter what it costs him to fulfill that obligation."

negative: The price of a share has two components: Bid: The highest price that someone who wants to buy shares is willing to pay for them. Ask: The lowest price that someone who has a share is willing to sell it for. The ask is always higher than the bid, since if they were equal the buyer and seller would have a deal, make a transaction, and that repeats until they are not equal. For stock with high volume, there is usually a very small difference between the bid and ask, but a stock with lower volume could have a major difference. When you say that the share price is $100, that could mean different things. You could be talking about the price that the shares sold for in the most recent transaction (and that might not even be between the current bid and ask), or you could be talking about any of the bid, the ask, or some value in between them. If you have shares that you are interested in selling, then the bid is what you could immediately sell a share for. If you sell a share for $100, that means someone was willing to pay you $100 for it. If after buying it, they still want to buy more for $100 each, or someone else does, then the bid is still $100, and you haven't changed the price. If no one else is willing to pay more than $90 for a share, then the price would drop to $90 next time a transaction takes place and thats what you would be able to immediately sell the next share for.

negative: "The other two answers seem basically correct, but I wanted to add on thing:  While you can exercise an ""American style"" option at any time, it's almost never smart to do so before expiration.  In your example, when the underlying stock reaches $110, you can theoretically make $2/share by exercising your option (buying 100 shares @ $108/share) and immediately selling those 100 shares back to the market at $110/share.  This is all before commission. In more detail, you'll have these practical issues: You are going to have to pay commissions, which means you'll need a bigger spread to make this worthwhile.  You and those who have already answered have you finger on this part, but I include it for completeness. (Even at expiration, if the difference between the last close price and the strike price is pretty close, some ""in-the-money"" options will be allowed to expire unexercised when the holders can't cover the closing commission costs.) The market value of the option contract itself should also go up as the price of the underlying stock goes up.  Unless it's very close to expiration, the option contract should have some ""time value"" in its market price, so, if you want to close your position at this point, earlier then expiration, it will probably be better for you to sell the contract back to the market (for more money and only one commission) than to exercise and then close the stock position (for less money and two commissions). If you want to exercise and then flip the stock back as your exit strategy, you need to be aware of the settlement times.  You probably are not going to instantly have those 100 shares of stock credited to your account, so you may not be able to sell them right away, which could leave you subject to some risk of the price changing.  Alternatively, you could sell the stock short to lock in the price, but you'll have to be sure that your brokerage account is set up to allow that and understand how to do this."

negative: "The correct answer to this question is:  the person who the short sells the stock to. Here's why this is the case.  Say we have A, who owns the stock and lends it to B, who then sells it short to C. After this the price drops and B buys the stock back from D and returns it to A. The outcome for A is neutral.  Typically stock that is sold short must be held in a margin account; the broker can borrow the shares from A, collect interest from B, and A has no idea this is going on, because the shares are held in a street name (the brokerage's name) and not A. If A decides during this period to sell, the transaction will occur immediately, and the brokerage must shuffle things around so the shares can be delivered.  If this is going to be difficult then the cost for borrowing shares becomes very high. The outcome for B is obviously a profit: they sold high first and bought (back) low afterwards. This leaves either C or D as having lost this money.  Why isn't it D? One way of looking at this is that the profit to B comes from the difference in the price from selling to C and buying from D.  D is sitting on the low end, and thus is not paying out the profit.  D bought low, compared to C and this did not lose any money, so C is the only remaining choice. Another way of looking at it is that C actually ""lost"" all the money when purchasing the stock.  After all, all the money went directly from C to B.  In return, C got some stock with the hope that in the future C could sell it for more than was paid for it.  But C literally gave the money to B, so how could anybody else ""pay"" the loss? Another way of looking at it is that C buys a stock which then decreases in value.  C is thus now sitting on a loss.  The fact that it is currently only a paper loss makes this less obvious; if the stock were to recover to the price C bought at, one might conclude that C did not lose the money to B.  However, in this same scenario, D also makes money that C could have made had C bought at D's price, proving that C really did lose the money to B. The final way of seeing that the answer is C is to consider what happens when somebody sells a stock which they already hold but the price goes up; who did they lose out on the gain to?  The person again is; who bought their stock.  The person would buys the stock is always the person who the gain goes to when the price appreciates, or the loss comes out of if the price falls."

negative: "This is the sad state of US stock markets and Regulation T. Yes, while options have cleared & settled for t+1 (trade +1 day) for years and now actually clear ""instantly"" on some exchanges, stocks still clear & settle in t+3.  There really is no excuse for it. If you are in a margin account, regulations permit the trading of unsettled funds without affecting margin requirements, so your funds in effect are available immediately after trading but aren't considered margin loans.  Some strict brokers will even restrict the amount of uncleared margin funds you can trade with (Scottrade used to be hyper safe and was the only online discount broker that did this years ago); others will allow you to withdraw a large percentage of your funds immediately (I think E*Trade lets you withdraw up to 90% of unsettled funds immediately). If you are in a cash account, you are authorized to buy with unsettled funds, but you can't sell purchases made on unsettled funds until such funds clear, or you'll be barred for 90 days from trading as your letter threatened; besides, most brokers don't allow this.  You certainly aren't allowed to withdraw unsettled funds (by your broker) in such an account as it would technically constitute a loan for which you aren't even liable since you've agreed to no loan contract, a margin agreement.  I can't be sure if that actually violates Reg T, but when I am, I'll edit. While it is true that all marketable options are cleared through one central entity, the Options Clearing Corporation, with stocks, clearing & settling still occurs between brokers, netting their transactions between each other electronically. All financial products could clear & settle immediately imo, and I'd rather not start a firestorm by giving my opinion why not. Don't even get me started on the bond market... As to the actual process, it's called ""clearing & settling"". The general process (which can generally be applied to all financial instruments from cash deposits to derivatives trading) is: The reason why all of the old financial companies were grouped on Wall St. is because they'd have runners physically carting all of the certificates from building to building.  Then, they discovered netting so slowed down the process to balance the accounts and only cart the net amounts of certificates they owed each other.  This is how we get the term ""bankers hours"" where financial firms would close to the public early to account for the days trading.  While this is all really done instantly behind your back at your broker, they've conveniently kept the short hours."

negative: A stock buy back reduces the number of stocks available on the open market.  Since stocks are literally a share in ownership a buy back of the stock then when the company repurchases it has the effect of increasing the percent of ownership of the company of each stock. Zynga has a Market Cap of ~1810M so a 200M buy back will increase the ownership value of each stock by ~12%.  This has had the effect of an immediate stock price bump of around 12% which is to be expected as the value becomes the expected post buyback value. However long term gains will require Zynga to turn around their business.  This bump will only be sustainable if they can.  If their business continues to decline then its stock price will continue to slide.  There are some who would rather see Zynga invest that 200m in getting a new product to market to bring revenues up rather than spending precious capital on a plan to temporarily bump a stock that is headed towards the floor.  If on the other hand the revenue is poised to recover and the company has the excess capitol buying back stock low is a great way to get the most back for your shareholders bucks. Can they repurchase at any price and any time? They can write a buy order for any price at any time in the future, though they have some restrictions from the SEC mostly involving disclosures.  But it is up to the sellers to choose to sell at that price.  If they execute the buy back at a rate comparable to market rate then they are more likely to get takers than if they attempt to buy it back at a significant reduction from market price.  So since today(10-25-2012) the it is selling for ~2.30  A buy order for 2.30 is going to get more action than one at 2.00.  Investors will often look at the companies buy back offer for a company in decline(like Zynga has been) as the true value of the company.  If so then a lowball buyback offer could add downward pressure on the stock price.


query: few question about debit credit and liabilities

positive: "Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for ""stock on hand"". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or ""equity""), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset ""Stock on hand"" by $500. Debit (increase) Asset ""Accounts receivable"" by $700. Credit (increase) Income ""Sales"" by $700. Debit (increase) Expense ""Cost of goods sold"" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset ""checking account"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset ""cash"". Credit (decrease) Capital ""shareholder equity"". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it ""capital"", others call it ""equity""): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big ""one thing"". 2: Every transaction must update two or more accounts. Each update is either a ""debit"" or a ""credit"". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there."

negative: "Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts. You might have account 1001 (Cash-Checking) and account 1002 (Cash-Savings). In that case, a movement of money between these two accounts should be tracked by a transaction between the GL accounts; credit checking, debit savings. It won't affect your balance sheet, but depending on your definition of liquidity of assets  it might affect working capital on your statement of cash flows (if you consider the savings account ""illiquid"" then money moved to it is a decrease in working capital). Basically, what you are creating with your ""store credit"" accounts for each client is an ""unearned revenue"" account. When clients pay you cash for work you haven't done yet, or you refund money for a return as ""store credit"" instead of cash, the credit is a liability account, balancing an increase in cash, inventory, or an expense (if you're giving credit for free, perhaps due to a mistake on your part, you would debit a ""Store Credit Expense"" account). This can be split out client-by-client in the GL if you wish, avoiding the need for a holding account. The way you want to do it, you'd have a ""Client Holding"" account. It must be unique in the GL and to the client, and yes, it is a liability account. To transfer to holding, you simply debit Unearned Revenue and credit Client Holding, logging the transaction as ""transfer of client store credit"" or similar (moving liability to liability; balance sheet doesn't change). Then, as you sell goods or services to the client, you debit Accounts Receivable and credit Revenue, then to record the payment you credit AR and debit Client Holding (up to its current credit balance, after which the client pays you Cash and you debit that, or the client still owes you). To zero out a remaining balance on the Holding account, debit Client Holding and credit Unearned Revenue. I don't think the Holding account, the way you want to use it, is a good idea. If you want to track each customer's store credit balance with a GL account, then create specialized Unearned Revenue accounts for each client who gets a store credit, named for the client and containing their balance (zero or otherwise). If you don't care about it at the GL level, then pool it in one Unearned Revenue account (have one Store Credit account if you must), and track individual amounts off the books."

negative: "Ditto Nate Eldredge in many ways, but let me add some other thoughts. BTW there are not four types of account, but five. You're forgetting equity, also called capital. Would it be possible to design an accounting system that does not have 5 types of accounts, maybe is simpler in other ways, and is internally consistent and logical? I'm sure it is. But what's the advantage?  As Nate points out, the existing system has been in use for hundreds of years. Lots of people know how it works and understand it.  I'd add: People have long since worked out how to deal with all the common situations and 99% of the odd cases you're likely to hit. If you invent your own system, you're starting from scratch. You'd have to come up with conventions to handle all sorts of situations. How do I record buying a consumable with cash? How do I record buying a capital asset with credit? How do I record paying off debts? How do I record depreciation? Etc etc. If you worked at it long and hard enough and you're a reasonably bright guy, maybe you could come up with solutions to all the problems. But why?  If you were approaching this saying, ""I see these flaws in the way accounting is done today. I have an idea for a new, better way to do accounting"", I'd say good luck, you have a lot of work ahead of you working out all the details to make a fully functioning system, and then persuading others to use it, but if you really do have a better idea, maybe you can revolutionize the world of accounting. But, ""The present system is too much trouble and I don't want to bother to learn it"" ... I think that's a mistake. The work involved in inventing your own system is going to end up being way more than what it would take to learn the existing system. As to, Aren't liabilities a lot like assets? Well, in a sense I suppose. A credit card is like a checking account in that you can use it to pay for things. But they're very different, too. From an accounting point of view, with a checking account you buy something and then the money is gone, so there's one transaction: reduce cash and increase office supplies or whatever. But with a credit card there has to be a second transaction, when you pay off the charge: So, step 1, increase debt and increase office supplies; step 2, decrease debt and decrease cash. Credit cards charge interest, well you don't pay interest to use your own cash. Etc. One of the beauties of double-entry book-keeping is that every transaction involves a debit and a credit of equal amounts (or a set of debits and credits where the total of the debits equals the total of the credits). If you combine assets and liabilities into, whatever you call it, ""balance accounts"" say, then some transactions would involve a matching debit and credit while others would involve a positive debit and a matching negative debit and no credit. I'm sure you could make such a system work, but one of the neat built-in protections against error is lost. There's a very logical distinction between things that you have or that others owe you, and things that you owe to others. It makes a lot of sense to want to list them separately and manage them separately. I think you'd pretty quickly find yourself saying, ""well, we have two types of balance accounts, those that represent things we have and which normally have positive balances, which we list on chart A, and those that represent things we owe and which normally have negative balances, which we list on chart B"". And before you know it you've just reinvented assets and liabilities."


query: Non Resident aliens - Question of standard vs itemized

positive: The IRS' primary reference Pub 519 Tax Guide for Aliens -- current year online (current and previous years downloadable in PDF from the Forms&Pubs section of the website) says NO: Students and business apprentices from India.   A special rule applies .... You can claim the standard deduction .... Use Worksheet 5-1 to figure your standard deduction. If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. Note the last sentence, which is clearly an exception to the 'India rule', which is already an exception to the general rule that nonresident filers never get the standard deduction. Of course this is the IRS' interpretation of the law (which is defined to include ratified treaties); if you think they are wrong, you could claim the deduction anyway and when they assess the additional tax (and demand payment) take it to US Tax Court -- but I suspect the legal fees will cost you more than the marginal tax on $6300, even under Tax Court's simplified procedures for small cases.

negative: "1040 or 1040NR depends on whether you are a resident alien or nonresident alien -- 1040/1040A/1040EZ for resident aliens, and 1040NR/1040NR-EZ for nonresident aliens. Determining whether you are a resident is somewhat complex, and there is not enough information in your question to determine it. Publication 519 is the guide for taxes for aliens. (It hasn't been updated for 2014 yet, so mentally shift all the years in the publication up by one year when you read it.) Since you don't have a green card, whether you are a resident is determined by the Substantial Presence Test. The test says that if (the number of days you were in the U.S. in 2014) + 1/3 of (the number of days you were in the U.S. in 2013) + 1/6 of (the number of days you were in the U.S. in 2012) >= 183 days (half a year), then you are a resident alien for 2014. However, there are exceptions to the test. Days that you are an ""exempt individual"" are not counted toward the Substantial Presence Test. And ""exempt individuals"" include international students, trainees, teachers, etc. However, there are exceptions to the exceptions. Students are not ""exempt individuals"" for a year if they have been exempt individuals for any part of 5 previous calendar years. (Different exceptions apply for teachers and trainees.) So whether you are an ""exempt individual"" for one year inductively depends on whether you have been an ""exempt individual"" in previous years. Long story short, if before you came to the U.S. as an F-1 student, you haven't been in the U.S. on F-1 or J-1 status, then you will be a nonresident alien for the first 5 calendar years (calendar year = year with a number, not 365 days) that you've been on F-1. We will assume this is the case below. So if you started your F-1 in 2009 (any time during that year) or before, then you would have already been an exempt individual for 5 calendar years (e.g. if you came in 2009, then 2009, 2010, 2011, 2012, 2013 are your 5 years), so you would not be an exempt individual for any part of 2014. Since you were present in the U.S. for most of 2014, you meet the Substantial Presence Test for 2014, and you are a resident alien for all of 2014. If, on the other hand, you started your F-1 in 2010 (any time during that year) or after, then you would still be an exempt individual for the part of 2014 that you were on F-1 status (i.e. prior to October 2014. OPT is F-1.). Days in 2014 in H1b status (3 months) are not enough for you to satisfy the Substantial Presence Test for 2014, so you would be a nonresident alien for all of 2014. If you fall into the latter case (nonresident alien), there are some alternative choices you have. If you were in the U.S. for most of those last 3 months, then you are eligible to choose to use the ""First-Year Choice"". I will not go into the steps to use this choice, but the result is that it makes you dual-status for 2014 -- nonresident until October, and resident since October. If you are single, then making this choice pretty much gives you no benefit. However, if you are married, then making this choice allows you to subsequently make another choice to become a resident for all of 2014. Being resident gives you some benefits, like being able to file as Married Filing Jointly (nonresidents can only file separately), being able to use the Standard Deduction, being able to use many other deductions and credits, etc. Though, depending on what country you're from, it may affect your treaty benefits, so check that before you consider it."

negative: It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this.

negative: You have left out the most important piece of information: are you an American citizen? If you are, then PFIC rules mean you need to be very careful not to invest in any foreign index funds/ETFs. That means it will probably be easiest for you to just leave the money in the US and continue to invest it there. If you do not have US citizenship, and have never had a green card, then you will qualify for non-resident alien status after you've been gone for 3 years. Once that happens, you won't owe US capital gains tax (though you will owe it in AUS). You will owe 30% tax on dividends, though. Much more at Investopedia.

negative: Why was I sent both 1042-S and 1099. Which amount is the right amount that has been withheld. Generally, each tax form you get will be about a separate income; for instance, you might get a 1099-DIV for dividends you earned from an investment and then a 1099-B for the profit or loss on selling that investment, in which case you'd report them both to the IRS. In this case, you've also had money withheld as a non-resident alien, which is why you've been issued a 1042-S. So you need to report both amounts to the IRS.

negative: It's true that the standard deduction makes the numbers less impressive. I ran your scenario through my favorite, most complete rent vs buy calculator, and your math isn't far off. However, there are a lot of deductions only available if you itemize. Medical expenses, moving expenses, job expenses, charitable contributions, local income/sales taxes, property tax, private mortgage insurance, etc. Property tax on that house alone is going to be nearly equal to the standard deduction, so the point is nearly moot. Anyways, the above linked calculator handles all of those, and more.

negative: He alienated whole countries and races of people. He also alienated more than half of America and he's wondering why  no one wants to buy his tacky condos or stay in his sub standard hotels? Moron. His base can't afford to buy those condos or stay at his hotels not till he gets rid those damn immigrants stealing coal jobs.

negative: "Your stupid excuses do not excuse people entering or residing in a country that has not given them permission to do so.  And the legal term is ""illegal alien"". No rational person thinks these are ""illegal"" people.  Say it properly, and stop your pathetic moralizing."

negative: The answer to this question requires looking at the mathematics of the Qualified Dividends and Capital Gains Worksheet (QDCGW). Start with Taxable Income which is the number that appears on Line 43 of Form 1040.  This is after the Adjusted Gross Income has been reduced by the Standard Deduction or Itemized Deductions as the case may be, as well as the exemptions claimed.   Then, subtract off the Qualified Dividends and the Net Long-Term Capital Gains (reduced by Net Short-Term  Capital Losses, if any) to get the non-cap-gains part of the Taxable Income. Assigning somewhat different meanings to the numbers in the OPs' question, let's say that the Taxable Income is $74K of which $10K is Long-Term Capital Gains leaving $64K as the the non-cap-gains taxable income on Line 7 of the QDCGW.   Since $64K is smaller than $72.5K (not $73.8K as stated by the OP) and this is a MFJ return, $72.5K - $64K = $8.5K of the long-term capital gains are taxed at 0%. The balance $1.5K is taxed at 15% giving $225 as the tax due on that part.   The 64K of non-cap-gains taxable income has a tax of $8711 if I am reading the Tax Tables correctly, and so the total tax due is $8711+225 = $8936.  This is as it should be; the non-gains income of $64K was assessed the tax due on it, $8.5K of the cap gains were taxed at 0%, and $1.5K at 15%. There are more complications to be worked out on the QDCGW for high earners who attract the 20% capital gains rate but those are not relevant here.

negative: As a gift, the responsibility lays with the giver to file a 709 with their taxes for gifting to a single entity (barring certain exclusions) an amount over $14,000 within the (2017) tax year. https://www.irs.gov/pub/irs-pdf/i709.pdf If this person is a foreign entity from outside the country, you might need to provide in your tax filing a form 3520 https://www.irs.gov/businesses/gifts-from-foreign-person The reporting limits are: more than $100,000 from a foreign estate or non-resident alien, or more than $15,102 from a foreign company. If you don't know who/where the money came from i.e. cash, it would be considered found money and fall under income (not a gift).

negative: you either tell your financial department about them (e.g. I used to get a student's tax discount), or you file them separately. But you don't have to file anything by default.  That is a comment connected to the question.  In the united states you can almost achieve this. 90% of the numbers on my tax form are automated. The W-2s are sent to the IRS, the 1099-s for my non retirement accounts are also sent. The two biggest items that take time are charities, and the educational benefits. Nobody has to claim every deduction they are entitled to. They must claim all the income, and decide to take the standard deduction. It would probably take less than an hour to finish the families taxes: both federal and state.

negative: Taxability depends on your tax residency status. Assuming you are non-resident Indian for tax purposes, then your income is non taxable in India.  If you keep the money in Saudi or transfer to India it would be same and non taxable

negative: MKC is non-voting stock, MKC/V is voting stock. Ofter times you'll see two or more stock symbols for a company.  These usually reflect different classes of stocks.  For example, voting vs. non-voting (as in this case) or preferred vs non-preferred stock.

negative: "No, virtually ever item in the CPI is adjusted using hedonics, which by definition can only be used to lower inflation, not adjust it up.  Hedonics is not necessarily bad, but it doesn't actually reflect inflation, it reflects standard of living vs. purchasing power, which is not useful for a purely monetary measure.  It also does not correctly reflect that despite the fact that a 1970's 20"" TV cannot from an economic standpoint be directly compared to a 2012 20"" TV, if the price is the same (adjusted for inflation), inflation represents how the value of the dollar has accrued vs the value of a 20"" TV, which is what the definition of inflation is.  So, no, I don't think you're correct on this. This is also kind of glossing over the fact that the CPI essentially makes the bold argument that energy and transportation prices never affect inflation."

negative: You can keep your Mutual Funds. You have to communicate your new status to fund house.  The SIP can continue. Please note you have to convert the savings account to NRO account. Most banks would keep the account number same, else you have to revise SIP debit to new NRO account. From a tax point of view, it would be similar to resident status. Right now short term gains are taxed. There are quite a few other things you may need to do. Although dated, this is a good article. PS: Once you become resident alien in US for tax purposes, you are liable for taxes on global income.

negative: Yes NRIs are allowed to open a DEMAT account in India from abroad.  Investments can be made under the Portfolio Investment NRI Scheme (PINS) either on repatriation or non-repatriation basis.  As per,the guidelines of the Reserve Bank of India it is  mandatory for NRIs to open a trading account with a designated institution authorized by the RBI.  They must avail either a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account to route the various investments.

negative: "When I was in this situation, I always did Married Filing Separately. In the space for spouse you just write ""non resident alien"". I'm assuming you don't make more than the Foreign Earned Income exclusion (about $100k), so the fact that you don't qualify for certain exemptions is probably irrelevant for you.  As a side note, now that you are married you have ""a financial interest in"" all her bank accounts so if her and your foreign bank accounts had an aggregate value of over $10k at any point in 2015 you have until June 30th to file an FBAR, listing both her and your accounts. If you have a decent amount of assets you might need to fill out form 8938 with your tax return too. Here is a link with the reporting thresholds. https://www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Reporting-for-U.S.-Taxpayers"

negative: It could be a a way to preserve the value of your money, but depends upon various factors. If a country defaults, and it leads to hyper-inflation, by definition that means that money loses its purchasing power.  In even simpler terms, it cannot buy as much tomorrow as I could today. Therefore people can be incented to either hoard physical goods, or other non-perishable items. Real-estate may well be such an item.  If you are resident in the country, you have to live somewhere.  It is possible that a landlord might try to raise rent beyond what your job is willing to pay.  Of course, in a house, you might have a similar situation with utilities like electricity... Assuming some kind of re-stabilization of the economy and currency, even with several more zeros on the end, it is conceivable that the house would subsequently sell for an appropriately inflation adjusted amount, as other in-demand physical goods may. Lots of variables. Good Luck.

negative: The word bespoke means made to order. Bespoke insurance means non-cookie cutter. That mean the thing your are trying to protect, or the risk to that item is not normally covered; so you need a non-standard type of policy. Your neighborhood insurance company doesn't handle a bespoke policy. There are companies that do.  Reinsurance is insurance on insurance. Company X has a risk they want to insure, so they go to insurance company A. After a while insurance company A realizes that they have sold a few of these policies and they have a risk if they guessed wrong. So they take out a policy with insurance company B to protect themselves if more than some percentage of their policies go bad. That policy takes bespoke reinsurance.

negative: "As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question ""Does a US LLC owned by a non-resident alien have to pay US taxes"" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice."

negative: "I took @littleadv 's recommendation that online apps only ask for citizenship due to post-9/11 legislation.  I applied to 2 banks in person (one big, one small), and at the dealership. None of my in-person applications ever touched on the issue of citizenship.  I even applied in person at the same bank that insta-rejected me online, and told them up front, ""I applied online but you rejected me because I'm not a permanent resident.""  The banker nodded, said ""that shouldn't matter here"", and continued processing my application. I did find it very hard to get a loan.  I have a credit score in the ""excellent"" range, but have only 1 open credit card (for 5 years).  Apparently, most lenders want to see more open credit before writing an auto loan.  The big bank said outright ""We want to see 3-5 credit cards open"".  However, the dealership did find a bank willing to extend me a loan. So: The most reliable way for a non-permanent resident alien to get an auto loan in the US is to avoid online applications.  Also, if possible, establish a wide credit history before you try."

negative: Canada doesn't tax non-residents on income earned/incurred outside of Canada. So, your sister should start with this page to determine the residency status. If she is indeed determined to be non-resident - she should look here to see her obligations. If all she earns she earns outside of Canada - her obligations will be very little, if at all. This is similar to almost any other country in the world, with the notable exception of the United States of America. US citizens are taxed regardless of their residency status, everywhere in the world on worldwide income (unless tax treaty says otherwise).

negative: First, the single worst reason to do anything is because most people are doing it. The second worst thing is to take tax advice from a non-tax pro. (Ironic, I understand, but read on) Run through your 2015 tax return. Do you itemize already? If not, there's a reason, the standard deduction for a couple is $12,600 in 2016, so a renter isn't likely to have enough deductions to itemize, even with a high state tax.  For 2016, project your total interest from the mortgage, and the year's property tax, then add your state income tax, and last, any charitable donations. This total comprises the bulk of what people take on their Schedule A. Now, since your current withholding assumes the standard $12,600, subtract this number, and you're left with the amount your taxable income will be reduced for the fact that you have the house. Last, divide this number by $4000. The result is how many more withholding allowances you can claim. One personal exemption (a withholding allowance) is exactly $4050 this year.  For what its worth, median home price for early 2016 was $190K. After 20% down, a $152K mortgage would cost about $6000 in interest the first year, and maybe $3000 in property tax. The average couple, making $60,000 or so won't have a state bill much over $3000, so shy of some nice donations, it's easy to have a house, yet still not itemize.  Of course, if you have higher income and a more expensive home, the numbers will be different.  The best you can do is to get tax software or use an online service and estimate the 2016 return based on your numbers. If you wish to post numbers via an edit to your question, I'm happy to update my answer a bit to your situation.  Note - the form you'll use to adjust withholdings, the W4, offers a worksheet to perform the calculation.  It asks in line 1 for your total itemized deductions, then subtract the standard deduction, then divide by $4050. Pretty much what I suggested above.

negative: Good question - I know you can keep the ISA in the UK and it won't lose its tax free status but you're not able to contribute it while you're not a UK resident. Not that its tax free status buys you that much if you're a non-resident as you could apply to receive tax gross on pretty much any savings account anyway. Given that the idea of tax-free saving outside a retirement account doesn't really exist here in the US I would assume that you will have to declare the interest as income and, if you don't pay any other taxes in the UK that would cover the amount you'd have to pay on your ISA under the foreign tax credit, you'd end up giving the IRS their pound of flesh. As I mentioned in an answer to a previous question, you really need to talk to an US accountant/CPA, preferably one that is familiar with UK taxation law as well.

negative: I'm not sure why you think that it matters that the distribution goes to an S-Corp vs an individual tax payer. You seem to think it has any relevance to your question, but it doesn't. It only confuses your readers. The situation is like this: LLC X is deriving income in State #2. It has two members (I and S) residents of State #1. Members I and S pay all their taxes to State #1, and don't pay taxes to State #2. State #2 audited member I and that member now needs to pay back taxes and penalties to State #2 on income derived from that State. Your question: Does that mean that member S should be worried, since that member was essentially doing the exact same thing as member I? My answer: Yes.

negative: As soon as the USA left the gold exchange standard, total factor productivity began to dramatically stagnate.   We can trace it back to the early 1900s, but because of electricity, oil, automobiles and computers it is best to track it from Nixon taking us off the gold standard:  http://azizonomics.files.wordpress.com/2012/06/tfp.jpeg  Coincidence? I don’t think so — a fundamental change in the nature of the money supply coincided almost exactly with a fundamental change to the shape of the nation’s economy. Is the simultaneous outgrowth in income inequality a coincidence too?  Keynesians may respond that correlation does not necessarily imply causation, and though we do not know the exact causation, there are a couple of strong possibilities that may have strangled productivity:  1.Leaving the gold exchange standard was a free lunch for policymakers: GDP growth could be achieved without any real gains in productivity, or efficiency, or in infrastructure, but instead by just pumping money into the system.  2.Leaving the gold exchange standard was a free lunch for businesses: revenue growth could be achieved without any real gains in productivity, or efficiency.  And it’s not just total factor productivity that has been lower than in the years when America was on the gold exchange standard — as a Bank of England report recently found, GDP growth has averaged lower in the pure fiat money era (2.8% vs 1.8%), and financial crises have been more frequent in the non-gold-standard years.  Bottomline, it is the best explanation for a fall in productivity even factoring in computers.

negative: Though non-resident Indians (NRIs) earn their living abroad, their obligation to file tax returns in India doesn't end. With the July 31 deadline for filing returns barely a month away, NRIs need to gear up to file their return if they have income in India that exceeds the basic exemption limit. How to Determine tax residency status: An NRI first needs to determine his tax residency status, that is, whether he falls in the category of resident or non-resident Indian (NRI) for tax purposes. While there may be no ambiguity regarding the status of an NRI who has lived abroad for a long time, those who have moved abroad recently or have returned to India after a long stay abroad need to ascertain their residency status properly.

negative: Look at the non-grocery store use of a single Whole Foods location. Amazon lockbox can be created for delivery holds of Amazon online orders that drives upscale foot traffic into the store. Standardize a few choices of meats then can compete as two hour shipping point of Plated meal prep alternative where can get other grocery items delivered at same time. Each WF location just became a food warehouse for Amazon with cold storage. Complex undertaking though Amazon is able to roll the dice.

negative: First of all depending on the type of IRA you may not have to pay taxes on withdrawals in the US at all. If you are withdrawing your principle from a Roth IRA then you don't owe taxes. Only when you withdraw the gains do you pay taxes on it. You have two options for withdrawals: Lump Sum Withdrawal: If you take a lump sum withdrawal you will owe taxes to the US (30% for non-resident aliens of the US), and according to DTAA; Article 23, you will file your taxes with India declaring your IRA or 401(k) withdrawal proceeds and claim credit on the taxes you paid to the US.  Monthly Pension Withdrawal: You can also receive monthly pension payments and you will only be taxed in the country in which you are a resident of. This is according to DTAA, Article 20. You would then have to submit necessary documentation to your payer in the US so that they do not withhold any taxes in the US. Just as a side note it might be just better to keep the money where it is and let it grow or roll it over to a Roth IRA if you are currently in a lower tax bracket for maximum savings of your principle. Here is a link with more detailed information of what I provided you: http://articles.economictimes.indiatimes.com/2012-01-25/news/30663129_1_taxable-income-nri-401k-plan

negative: "There's currently not much reason to keep around a long-term non-deductible Traditional IRA in my opinion -- a Roth IRA is almost strictly better. Think about it: a non-deductible Traditional IRA vs. a Roth IRA of the same amount. In both cases, contributions are after-tax (so no tax deduction). But when you withdraw, for the Roth IRA you don't have to pay tax, and for the non-deductible Traditional IRA, you have to pay tax on the ""earnings"". A Roth IRA can be contributed to at pretty much any income level, thanks to the backdoor Roth IRA process (which uses a temporary non-deductible Traditional IRA in the process). So there is not much reason for a long-term non-deductible Traditional IRA. As for your question, a non-deductible Traditional IRA vs. a taxable account. Well, a non-deductible Traditional IRA is contributed to with after-tax money, and taxed on the earnings only on withdrawal. So the taxation is almost identical to things like stocks and homes, where the gain is not realized until the thing is sold. However, compared to things like savings accounts and bonds, where you get taxed on the interest yearly, it is much better. Every time you get taxed on gains like this, it is taxing gains earned from after-tax money, so if you think of an amount of money as being equivalent to the amount of money it grows to over time (time value of money), then it is taxing money that is (or grown from money that is) already taxed. So it is better to have this only happen at the end at withdrawal than every year."

negative: It is not a question of where you have your driver's license.  It is a question of the states' tax related residency rules.  (Though a driver's license can be a part of that question.) Since you likely have a residence in NYC and so can prove residency through a lease, bills, etc., you probably have to file as a NYS/NYC resident.   I do have to question your maintaining a California driver's license if you are not a resident.  If you are attempting to maintain dual-residency, look into both states' residency rules to see if you are liable for taxes in both states.   California seems particularly picky about these types of situations, probably due to concerns that you may be trying to circumvent California taxes.  That said, it usually revolves around income in the state.  Of course, if you maintain residency in California as well, the argument can be made that you owe some taxes due to the fact that you take advantage of state services.  (E.g. you drive on California roads.) I suggest you consult a tax professional knowledgeable in these issues to sort out the details.

negative: "Rob - I'm sorry your first visit here has been unpleasant.  What you are asking for is beyond the capability of most software. If you look at Fairmark.com, you find the standard deduction for married filing joint is $12,200 in 2012, and $12,400 in 2013. I offer this anecdote to share a 'deduction' story - The first year I did my MIL's taxes, I had to explain that she didn't   have enough deductions to itemize. Every year since, she hands me a   file full of paper substantiating medical deductions that don't exceed   7.5% of her income. In turn, I give her two folders back, one with the 5 or so documents I needed, and the rest labeled ""trash"". Fewer than 30% of filers itemize. And a good portion of those that do, have no question that's the right thing to do. e.g. my property tax is more than the $12K, so anything else I have that's a deduction adds right to the number.  It's really just those people who are at the edge that are likely frustrated. I wrote an article regarding Standard Deduction vs Itemizing, in which I describe a method of pulling in one's deductible expenses into Odd years, reducing the number in Even years, to allow a bi-annual itemization. If this is your situation, you'll find the concept interesting.  You also ask about filing status. Think on this for a minute. After pulling in our W2s (TurboTax imports the data right from ADP), I do the same for our stock info. The stock info, and all Schedule A deductions aren't assigned a name. So any effort to split them in search of savings by using Married Filing Separate, would first require splitting these up. TurboTax has a 'what-if' worksheet for this function, but when the 'marriage penalty' was lifted years ago, the change in status had no value. Items that phaseout over certain income levels are often lost to the separate filer anyway. When I got married, I found my real estate losses each year could not be taken, they accumulated until I either sold, or until our income dropped when the Mrs retired.  So, while is respect your desire for these magic dials within the software, I think it's fair to say they would provide little value to most people.  If this thread stays open, I'd be curious if anyone can cite an example where filing separately actually benefits the couple."

negative: "Assuming you are Non-Resident Indian for tax purposes, this transaction is not taxable. Indian tax law doesn't qualify ""gifts"" as taxable income."