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kato5665
Level 2
June 7, 2019
Solved

Taxation of long term capital gains

  • June 7, 2019
  • 2 replies
  • 242 views
My ordinary income (total taxable income without capital gains) is less then $36,650 (single). Everything I have read says therefore my tax rate on capital gains is zero. I have $1,000,000 of LT cap gains. When I use "Qualified divs & cap.gains Worksheet" it shows I have to pay income taxes. What is wrong with my thinking that I should not have to pay taxes on these gains?  Thanks.
Best answer by Texas Roger
The LT capital gains are added to your other taxable income to determine the tax bracket you are in for determining what capital gains tax rate to use. The tax bracket would be 39.6% so your capital gains tax rate would be 20% plus you must pay 3.8% Net Investment Income Tax in addition to the 20%.

2 replies

T
TaxGuyBill
Level 13
June 7, 2019
You had a $1,000,000 capital gain and you didn't consult a tax professional before the sale?
    T
    Level 15
    Texas RogerLevel 15Answer
    Level 15
    June 7, 2019
    The LT capital gains are added to your other taxable income to determine the tax bracket you are in for determining what capital gains tax rate to use. The tax bracket would be 39.6% so your capital gains tax rate would be 20% plus you must pay 3.8% Net Investment Income Tax in addition to the 20%.
    M
    madchemist007
    Level 2
    June 7, 2019
    Isn't the long term capital gain taxed 0 if the person's tax bracket is below 15%?  Why does or doesn't apply to a long-term capital gain?
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