The Most Active and Welcoming Investment Community Online
Join and Discover the Best Way to Invest and Grow your Money.

Welcome to Our Community
Wanting to join the rest of our members?
Feel free to sign up now.

Investment tax and regulations

Discussion in 'What is Investing? (START HERE)' started by InvestOpen, Jul 4, 2018.

Thread Status:
Not open for further replies.
  1. InvestOpen

    InvestOpen Administrator Registered

    Messages:
    52
    Likes Received:
    4
    Trophy Points:
    8
    Investment tax and regulations

    Financial markets are one of the heaviest regulated industries in the world. The interconnectedness of the global markets, coupled with the vast amounts of capital and historical pitfalls leave them constantly under scrutiny by governmental regulators. However, in order to provide the efficient flow of funds and transactions countries also work with markets to streamline processes and maintain transparency and stability. Governments themselves often provide different taxation rules on investments in order to boost or weaken certain types of investments. Regardless of where an investor lives in the world, there are basic concepts that can help anyone.

    Country Specific Rules & Taxes: Although many countries have similar rules on transactions, the regulations and taxation treatments of investments vary wildly across the globe and even within countries. How much tax is due can depend on what was invested in, how long it was held, who did it, why it was undertaken, as well as where they reside. Each investor should work with their own local legal and accounting experts to understand what rules they need to adhere to as well as the tax rates that apply to them.

    Tax Deferred or Shielded Accounts: Many governments offer regulated investment accounts such as 401K, IRA, pensions, and more that have different tax treatments than regular investments. These accounts are taxed either before money is deposited, or when money is withdrawn. While in these accounts, the investments are shielded from all forms of taxation associated with investing.

    Accurate Reporting: No matter the country, accurate reporting of all transactions and contracts provides the foundation of price discovery (the act of finding the price at which a transaction will occur) and contracts. Withholding or manipulating information in any country normally leads to severe fines and penalties. While the amount of information required may be different by country, those requirements are applied uniformly to all market participants in order to create a level playing field.

    Capital Gains: Capital gains refers to the change in market value of an investment over time. If you buy one share of a company at $100 and it’s worth $105 a year later, you are said to have achieved $5 in capital gains. Typically, capital gains are assessed only at the sale or closing of a transaction. Depending on the length of time the investment was held as well as what type of investment was held, tax rates can change. Capital gains also applies to real estate that is sold at a higher price from which it was purchased.

    Dividends: Dividends are a form of disbursement companies make in order to return gains to shareholders. These funds can be continuous at regular intervals, or occur as one-time payments. Again, dividends may be taxed at different rates than either capital gains or ordinary income.

    Coupon: Similar to dividends, coupons are payments that are guaranteed by debt that are paid out at predetermined, contractually obligated intervals. Unlike dividends, companies or individuals cannot stop making coupon payments without a breach of contract, which, in some cases, can lead to bankruptcy.

    Find yourself a good accountant or firm that can advise you on your investments.

    < Introducing your financial team | Types of Investments >

    ----------------------------------------------------------------------------------------------------
    :investopen: Have a question or need help regarding "Investment tax and regulations"?: Post Here.
    ----------------------------------------------------------------------------------------------------
     
    Last edited by a moderator: Aug 1, 2018
  2. Crypto Is Making People Rich

    And You Can Become The Next Millionaire…

Featured Resources (View All)

Thread Status:
Not open for further replies.