Hello, I’ve been trying to maximize my profit by buying dips and selling highs. However I wasn’t sure if every time I sell my stock, the profit is considered taxable. For example, if I invest 5k and sell it for 6k, with a profit of 1k, and then reinvest the 6k, and then sold for 7k, with 1k profit. Would I be taxed for only the profit made total, so 2k, or the amounts I sold everything total, 14k?
Yes- you do not realize gains or losses until you actually sell the stock. After you sell the initial stocks/bonds you have realized the gain. When you buy the new, different stocks you haven't realized anything until you then sell those.
There is one exception to this, called the "Wash-Sale Rule". From Investopedia.com:
With the wash-sale rule, the IRS disallows a loss deduction from the sale of a security if a ‘substantially identical security' was purchased within 30 days before or after the sale. The wash-sale period is actually 61 days, consisting of the 30 days before and the 30 days after the date of the sale. For example, if you bought 100 shares of IBM on December 1 and then sold 100 shares of IBM on December 15 at a loss, the loss deduction would not be allowed. Similarly, selling IBM on December 15 and then buying it back on January 10 of the following year does not permit a deduction. The wash-sale rule is designed to prevent investors from making trades for the sole purpose of avoiding taxes.
Yes. As long as the stock is in a taxable account (i.e. not a tax deferred retirement account) you'll pay gain on the profit regardless of subsequent purchases.
If the sale is a loss, however, you'll risk delaying the claim for the loss if you repurchase identical shares within 30 days of that sale. This is called a wash sale.
The only way this could work is if you convince your broker that there was a malfunction in their site/app and they agree to adjust their records as if you had not sold the stock. If you have a good case, they might be more likely to agree to this since the trade was immediately reversed, so what you're asking for wouldn't cost them much (compared to someone who's claiming that a malfunction led to an outright loss and is seeking reimbursement for that loss).
Otherwise, if you made an unintended trade by your own mistake in a taxable account, your 1099-B will show that trade and you will be stuck with the tax consequences (in this case, a taxable gain -- there is no "wash sale" gain exclusion). You'd just have to look at the bright side, that the shares you repurchased have a higher basis now and you will owe less tax in the future.
It depends. If the 10 shares you sold were sold at a loss, then buying back those 10 shares immediately after, results in a wash sale, in which case there is no tax consequence. If the 10 shares you sold were sold at a profit, then you will owe capital gains taxes on those profits when you file your taxes.