Share your insights or perspective on the financial matter presented in the input.

Hypothetical: can taxes ever cause a net loss on otherwise-profitable stocks?
The original post's $16 has two errors: Here is the first scenario: .                                                 Tax Liability($) on   Net .                        Cash    # of     Price    Paper     Realized   Value Time:                     ($)    Shares   ($/sh)   Profits    Profits    ($) 1. Start with:            100        -      n/a         -          -      100 2. After buy  10@10$/sh:    -       10       10         -          -      100 3. Before selling:          -       10       12        (5)         -      115 4. After sell 10@12$/sh:  120        -      n/a         -         (5)     115 5. After buy  12@10$/sh:    -       12       10         -         (5)     115 6. Before selling:          -       12       12        (6)        (5)     133 7. After sell 12@12$/sh:  144        -      n/a         -        (11)     133 8. After buy  14@10$/sh:    4       14       10         -        (11)     133 9. Before selling:          4       14       12        (7)       (11)     154 10.After sell 14@12$/sh:  172        -      n/a         -        (18)     154  At this point, assuming that all of the transactions occurred in the same fiscal year, and the realized profits were subject to a 25% short-term capital gains tax, you would owe $18 in taxes.  Yes, this is 25% of $172 - $100.