When you add a long term capital gain on your tax return, the tax liability does not simply go up by the amount of long term capital gain tax. Other factors will come into play and can affect your tax liability.
Two things that can affect your total tax:
- The addition of the long term gain will add to your AGI and lower your earned income tax credit
- The capital gain may trigger or add to the Net Investment Income tax (NIIT) of 3.8%.
Please read this IRS document about the NIIT.
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