Capital gain calculation

Forum|Forum|4 years ago
March 14, 2022
2 replies
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Why my capital gain long term is $20,000 on 1099b but on the 1040 form line 7 is $9000 only ? Maried join and income is $120,000

Bsch4477

Level 15

Look at Sch D.

Vanessa A

Level 15

Do you have losses to offset your capital gains? Carried over from past years? Did you enter a cost basis or other expenses associated with the capital gain? If so, then only the net amount would be reported on line 7.

If not, double check your entries. If you entered $20,000 and have no losses to offset the gains, $20,000 should show up on your line 7.

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quinnkhcAuthor

Level 2

Hi,

Thanks for your response. My question:

1. if I have losses carried over in the previous year, what is the maximum to offset my capital gain?

I heard only $3000 per year, is it correct ?

2. How capital gain is calculated ? My tax bracket is 22%, if I enter capital gain in line 7 and added all lines from 1-15, line 16 is taxable income. So my capital gain is taxed at 22% ? (This should be 15%)

JillS56

Level 10

It depends. If you have gains for 2021 you can use the loss carryforward to offset your gains. You are not limited on how much you can use as an offset to gains. However, if you have losses for 2021 you can only take the $3,000 loss and care the rest over to 2022.

Short-term capital gains are taxed at your ordinary tax rate.

Long-term capital gains are typically taxed at lower rates than short-term gains and ordinary income, from 0% to 20%, depending on your taxable income.