Something similar happened to me - the tax due just seemed way too low. I must have gone through the Qualified Dividends and Capital Gain Tax Worksheet (page 35 in 1040 Instructions) a dozen times thinking I made a manual error somewhere, or that there was some typo in the worksheet.
The confusion comes from just how we think. If you have $100,000 in capital gains and capital gains are taxed at 15%, then you must owe $15,000 in taxes, right? Wrong! The first $80,000 in capital gains are actually tax-exempt, being taxed at 0%. The $20,000 remaining are taxed at 15%, so you owe only $3,000 in taxes.
From the IRS... https://www.irs.gov/taxtopics/tc409
"The tax rate on most net capital gain is no higher than 15% for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $80,000.
A capital gain rate of 15% applies if your taxable income is $80,000 or more but less than $441,450 for single; $496,600 for married filing jointly or qualifying widow(er); $469,050 for head of household, or $248,300 for married filing separately."
This is one of those very rare situations where when something is too good to be true, it actually is true!
