The answers to your questions are shown below. However, keep in mind that only you know the true and total investment, including reinvested dividends. The financial companies are now required to keep track, however that's only as long as the investment is in their hands. Once moved from one financial company to another, the cost basis may not be clear to the new company.
The answers below assume the long term holding period which is more than one year. It starts with the first in-first out (FIFO) time frame.
1) Am I correct that I will only owe taxes on the $200,000?
2) If so, then will that $200,000 will be taxed at 15% rate (given my income).
- The gain will be taxed as low as 0% up to a maximum of 20% depending on your income level per tax year.
- IRS Tax Topic 409 - Capital gains tax rates at various income levels
- Tax will be calculated on the Schedule D worksheet.
3) Will that $200,000 be added to my income and push me into a higher tax bracket, or will I just owe the cap gains tax plus whatever the tax is on my regular taxable income (as if I never sold any shares)?
- You will pay tax on your regular income at whatever rate, depending on filing status and income level; you will pay tax on the capital gain at the rates shown above. Income levels will change with inflation.
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