The rates are on taxable income and not AGI. If you are single, your AGI would be reduced by $12,000 for the standard deduction. Let's just assume your taxable income instead of AGI is $425,800 and it is all LTCG. Of the $425,800 taxable income, $38,600 of it is taxed at 0%. The balance of $387,200 is taxed at 15%. If your taxable income was $425,801 instead of $425, 800, then the next $1 of capital gains would be taxed at 20%. Only the $1 is taxed at 20%.
