Investors & landlords

Your conclusion is incorrect. The capital gains are added to your other taxable income to determine what capital gains tax bracket you are in. You would have 3 different capital gains tax rates on $500,000 of long term capital gains--0%, 15% and 20%.

Here are the capital gains tax brackets for each range of taxable income including the capital gains amount:

Tax rate            Single                           Joint                   Head of household
0%                    $0 to $38,600          $0-$77,200         $0-$51,700
15%                    $38,601-$425,800 $77,201-$479,000 $51,701-$452,400
20%                    $425,801 and up         $479,001 and up $452,401 and up

There is also a Net Investment Income Tax of 3.8% that applies in incomes above certain thresholds. See this IRS pub for the threshold amounts: <a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax">https://www.irs...>