The capital gains flow into the Form 1040 from the new Schedule 1 (and possibly a Schedule D before that), and they will show as part of total income and adjusted gross income, which is likely what you are seeing on the Form 1040, Lines 6 and 7. However, the actual tax calculation occurs on the "Qualified Dividends and Capital Gain Tax Worksheet". On that worksheet is where the LTCG get the favorable tax treatment.
