At a high level can anyone describe to me if I trade using a margin balance. Meaning I use the brokerage's money to trade (hopefully I am using the right wording). I traded 50k on margin balances (aside from my normal capital).
So lets say I trade 50k on margin, I bought a stock worth 10k and sold it for 20k. My margin balance is still 30k. I made a 10k profit but paid back the 10k originally given and made a profit on the 10k but I still now owe 30k into the margin account to cover all of my prior trades.
Do I owe tax on that? Because technically I made 0 dollars I was just covering the margin and not actually putting anything into my pocket.
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