If I invested 50k in stocks and the stocks gained 100% [(50k x 100%) =
100k]  I would have a capital gains of 50k [((50k x 100%)-(50k))=50k].

How much capital gains tax would I have to pay on my 50k investment?

Please keep in mind that the investment is held less then one year.

A five star answer would answer the questions above and provide links.
I will tip very well for an answer.

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Request for Question Clarification by omnivorous-ga on 27 Aug 2004 06:06 PDT

Cashindahat --

We don't know if that 50K Euros; 50K pounds; 50K American dollars; 50K
Canadian dollars; 50K Australian dollars -- or 50K lakhs.  For a
researcher to help, they'd need to know what country's tax laws you'd
like applied.

Best regards,

Omnivorous-GA

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Clarification of Question by cashindahat-ga on 27 Aug 2004 07:26 PDT

USD Dollars - Assume USA Tax Laws for residents of California.

Cashindahat --

First, please note that Google Answers' terms of service note that:
"Information provided via the Services is not intended to substitute
for informed professional medical, psychiatric, psychological, tax,
legal, investment, accounting, or other professional advice."

However, having navigated through tax websites before, I think that we
can get you started.

First, note that a sizable capital gain must be filed as income during
the quarter involved, using Form 1040-ES:

U.S. Internal Revenue Service
"Capital Gains FAQ" (undated)
http://www.irs.gov/faqs/faq-kw27.html

The form itself is here:
"Form 1040-ES" (for 2004)
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

And it may be handy to know where you can find assistance if IRS sites
are confusing:
"How to Get Tax Help"
http://www.irs.gov/publications/p505/ch05.html


LONG-TERM OR SHORT-TERM GAIN?
================================

The most important determination is whether the asset has been held
more than 1 year, the period that qualifies it for favorable long-term
tax treatment.  It appears that yours has not, so the tax rate will be
between 20% and 28%, depending on the type of business.  Note that, in
addition to filing taxes during the quarter, capital gains for the
year get reported on Schedule D of your annual tax return:
"Topic 409 - Capital Gains and Losses," (undated)
http://www.irs.gov/taxtopics/tc409.html


CALIFORNIA TAXES
=================

The state of California has its own set of rules and tax forms. 
Estimated taxes are supposed to be paid to the state also:
California Franchise Tax Board
"FAQ"
http://www.ftb.ca.gov/online/myacct/faq.html

The form required for the estimated payments (with instructions
attached) is here, though you may note that the estimated tax form is
still dated 2003:
"California 540-ES" (2003)
http://www.ftb.ca.gov/forms/03_forms/03_540es.pdf?64203

An entire list of California tax forms is available here:
"2003 Common Forms for Individuals"
http://www.ftb.ca.gov/forms/forms_results.asp?FormType=Common+Forms-Individuals&FormYr=2004&Submit2=Get+List

The state of California doesn't encourage taxpayers to pick up the
phone with queries but does provide some online support if you have a
customer service number already.  Most of the support information is
linked off the Franchise Tax Board's home page:
http://www.ftb.ca.gov/individuals/index.html


Google search strategy:
*  use www.irs.gov site search
*  California income tax


Best regards,

Omnivorous-GA

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Clarification of Answer by omnivorous-ga on 27 Aug 2004 16:11 PDT

Cashindahat --

Grammatoncleric is right about the tax treatment being short term. 
Topic 409 (linked above) is about taxes on long-term (1 year or more
of holding).

I won't speculate on the marginal tax rate for you, inasmuch as other
offsetting losses or other income may change that dramatically.

Best regards,

Omnivorous-GA

You pay ordinary income rates on short term capital gains.  If you are
in the 33% tax bracket and the $50,000 doesn't push you into the 35%
tax bracket, you will be liable for 33% federal short term capital gains tax on
the $50,000.  You will also pay 9.3% California capital gains.

You owe: $16,500 in federal short term capital gains
You owe: $4,650 in California capital gains

Total: $21,150 in taxes.