rjs
Level 15
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

Get your taxes done using TurboTax

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. You have to compare your entire Form 1040 line by line before and after adding the capital gain distributions to see what else is changing besides the amount of capital gain. If there's a change in an amount that comes from another form or schedule, you have to look at that form or schedule to see what's happening.

 

View solution in original post