rjs
Level 15
Level 15

Get your taxes done using TurboTax

How do you know the amount of tax that was calculated on a specific transaction? Did you look at the Qualified Dividends and Capital Gain Tax Worksheet to see what tax rate is being applied to the capital gain?


You can't go by the increase in the total tax on your tax return because adding income to a tax return can have side effects besides the direct tax on the added income. The increase in income could reduce or eliminate various deductions or credits that are not related to the income that was added, but that have income-based limits or phase-outs. If you received Social Security benefits it could make more of your Social Security taxable. These side effects increase your total tax, but they have nothing to do with the tax rate that is applied directly to the capital gains.


Why did you mention that you are in Seattle? Federal tax is the same throughout the country. Where you live does not affect your federal tax.


The tax is not calculated on individual transactions. It's calculated on your total income, and lower rates apply to the portion of your total income that is long-term capital gain. You can't determine what the tax rate is by looking at the increase in tax as a percentage of the amount of income. As I suggested above, you have to look at the Qualified Dividends and Capital Gain Tax Worksheet to see what tax rates are being used for long-term capital gains.