Investors & landlords

All capital gains are added to all your other income in order to determine your taxable income, but that doesn't mean that long term capital gains are taxed at ordinary income tax rates.  Long term capital gains and qualified dividends are taxed at lower Long Term Capital Gains rates while the rest of your income is taxed at ordinary tax rates.  The two are added together to come to your tax liability for the year.

 

Look at the "Qualified Dividends and Capital Gain Tax Worksheet " to see this calculation.