DianeC958
Expert Alumni

Business & farm

It is because your income on the capital gain is over $483,900 before you add any other income.  

 

Just like the tax brackets depend on the amount of income tax you pay the same is true with Capital Gains.  When you total income exceeds the amounts below you end up being charged a higher tax rate on your Capital Gains.

 

FILING STATUS                        0%                 RATE15%                      RATE20% RATE

Single                                Up to $39,375       $39,376 – $434,550      Over $434,550

Married filing jointly         Up to $78,750       $78,751 – $488,850      Over $488,850

Married filing separately  Up to $39,375       $39,376 – $244,425      Over $244,425

Head of household           Up to $52,750       $52,751 – $461,700      Over $461,700

 

Link to more information about Capital Gains

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