Long Term Capital Gains at ZERO??

[Cannonfm4n]

I have $227,000 in long term capital gains in a taxable account mutual fund. Since I have no earned income, my internet searches all seem to come up with a short answer of a 0% tax rate (Federal). I was thinking of "re-setting" this capital gain at ZERO this year, as I do anticipate earned income in future years.

Is there any amount cap on the ZERO Federal rate for long term Capital Gains.

Head of Household

1 Dependant

[tagteam]

Your post is somewhat difficult to decipher since you wrote "re-setting this capital gain at zero". 

Obviously, you cannot "reset" capital gains; you can either recognize them through sales transactions and report them on your income tax return or offset them with capital losses. 

Regardless, you might want to use TaxCaster (link below) to get a rough idea of your tax liability on $227,000 in capital gains.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

[Cannonfm4n]

Thanks for the response!

Sorry. I used confusing terminology.

What I should have said is that I am contemplating realizing all $227,000 in long term Capital Gains in calendar year 2020  when I have no earned income in anticipation that the net tax rate on the long term gain would be ZERO.

I ran this through the Tax Caster as suggested and added the following relevant information:

Head of Household

1 dependent under 13

$19,000 Mortgage interest

$4,500 Property tax

$2,000 Charitable

The result was:

2018 Estimated Federal Amount Owed

(After Tax Reform)

$23,508

Therefore, it seems that there must be some Cap on the amount of long term Capital Gains that can be realized at the 0% rate, but I cannot determine the calculation. 

Potentially, I could spread the gain over more years at the 0% rate  if I understood the calculation methodology.

[tagteam · Accepted solution]

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@Cannonfm4n wrote:

Potentially, I could spread the gain over more years at the 0% rate  if I understood the calculation methodology.

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For Head of Household, the 0% long-term capital gains tax bracket is $0 to $52,750 (taxable income) in 2019.

If you only have long-term capital gain to report, then you will be in the 15% tax bracket on any gain that exceeds $52,750 of taxable income.