@heather64 I think you are confusing 'income tax' with 'income'.
you have to determine "income" before you can determine "income tax".
let's look at the federal return and use your example. There would be no impact to Line 11, Adjusted Gross Income, on the federal return since the transactions in your example net to zero.
NC begins the tax return with that same Line 11. So since there is no impact to Line 11, there is no impact on the State return either. So no impact on TAX. Given your example, it would not impact your STATE income tax.
But let's use another example. Let's say your Federal Income is $30,000. And then you sell stocks for a gain of $10,000. That would increase Line 11 of the Federal return by the same $10,000. The FEDERAL INCOME TAX would not change since the capital gains tax at that income level is 0%.
HOWEVER, NC uses that same Line 11 to begin its calculation, and there is a flat tax in NC with nothhing called ' capital gains tax'. So NC would tax that $10,000 of additional income at 4.75% in 2023 which means while there would be no federal tax due to this transaction, NC tax would increase by $475.
does that make sense?
(and again, 5.25% was the 2021 tax rate. the state is reducing tax rates so it is 4.99% in 2022 and 4.75% in 2023).
