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Level 2

Solved

I'm estimating my 2018 income taxes (1040) using turbotax and I don't understand the handling of capital gain tax in the new 2018 forms

Forum|Forum|7 years ago
June 6, 2019
2 replies
0 views

I've entered some estimated stock transactions on Form 8949, which flows to Sch D.

From Sch D the net gain flows to the new Sch 1.

From Sch 1 it flows to the 1040 where it is added in to line 6.

At that point, deductions are applied and then tax is figured.

It would seem that my capital gains are being taxed at my full tax rate which is greater than the capital gains rate (because capital gains has been fully added to my income).

What is going on? Shouldn't capital gains be taxed at a lower rate than income?

TurboTax Deluxe Windows

Best answer by Critter

The entire amount of the gain IS added to your other income as it always has in the past ... then the taxes are calculated using a worksheet and not the tax table ... nothing has changed in this regard with the new laws just the look of the form 1040 has changed.

Switch to the FORMS mode to review the Qualifying Dividends & Capital Gain Worksheet to see how those taxes are being calculated.

Level 15

The entire amount of the gain IS added to your other income as it always has in the past ... then the taxes are calculated using a worksheet and not the tax table ... nothing has changed in this regard with the new laws just the look of the form 1040 has changed.

Switch to the FORMS mode to review the Qualifying Dividends & Capital Gain Worksheet to see how those taxes are being calculated.

A

Anonymous

if your net capital gains were short -term, they would be taxed at the normal tax rates.

RedCabAuthor

Level 2

Agreed.