Yes, the $100,000 capital gain is also included in the income when the tax calculation is done. This calculation is done on the Qualified Dividends and Capital Gains Tax Worksheet within TurboTax.
The purpose of the worksheet is to apply the capital gains tax rates to the capital gain itself. So, in the situation you described, a portion of the capital gain is being taxed at 0%, then the remaining amount is taxed at 15%.
You can see this worksheet in the following IRS Publication 2024 Instructions for Schedule D. The worksheet is on the last two pages of the PDF document.
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