Is investment taxed?
dfranke: The profit you make on investment is taxed as capital gains.  The law makes a distinction between short-term and long-term gains: if there's less than a year between when you invest and when you cash out, you pay the same tax rate as for ordinary income.  If there's a year or longer, then you pay the more favorable tax rate of 15%.  If you lose money investing, you can claim the loses on your tax return and use them to offset gains in future years.