Dear Champ,
I read your texts below and am so impressed how knowledgeable you are. May I impose on you for my situation? I studied your example to a great extent. Here is how I applied to my situation. Please correct me if I am totally off base. Thank you very much.
I am over 65. For 2023, I anticipate long term capital gain of $300,000 as a result of buying a property in cash. I will have capital loss carry forward to 2023 of $100,000. Standard deduction for senior is $15,700. My AGI is $40,000. The top of the 0% rate for LTCG is $44,625. Given all these information for year 2023, would I be able to reduce my capital gain to $179,675.
Here is how I calculate based on what I learned from you. My taxable income should be $24,300 (i.e. $40K minus deduction of $15,700). The top of the 0% bracket, $44,625 minus taxable income of $24,300 is $20,325. So there is a room for $20,325 of capital gain in the 0% bracket. The rest of LTCG, $300,000 - $100,000 (carry forward loss) - $20,325 =$179,675 goes into the next higher bracket and will be taxed at the 15% rate. In conclusion, I spare $20,325 for being taxed. Am I correct?
I look forward to hearing from you very much. Thank you.
Maureen
