Confirming long term gain tax rate calculation for 2020

[Hal_Al]

Q.   Is there still a room for $20,325 of capital gain in the 0% bracket for me? 

A. Yes.  The first $20, 325 will be taxed at 0%

Q.  Am I eligible I wonder?  

A.  Yes. Higher total and taxable income, because of the taxable gain,  does not reduce the amount taxed at 0%. If your taxable income gets above $459,750 (Single), the capital gains rate goes from 15% to 20% (on the amount over $459,750).

$24,300 of the capital gain will be subject to the  net investment income tax (3.8%), effectively taxing it at 18.8% (15 + 3.8).  https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

[april4mar]

Thank you, Hal_Al.  It's a great catch for additional 3.8%.  Got it. 

You guys are very knowledgeable about all tax matters.  I am very impressed.

[NCperson]

@april4mar in fact ALL your investment earnings - interest, dividends, capital gains - will be subject to the 3.8% if your income exceeds $200,000 ($250,000 joint filing)

1) 3.8% times interest dividends, capital gains on the portion of income that takes you over the threshhold.

2) Let's say you filed 'Single" and your total income was $230,000.  $50,000 of which was interest, dividends and capital gains.  So the NIIT would be 3.8% on the part over $200,000 or $30,000*3.8%.

my point is that it's not only the capital gains that is subject to the 3.8%, depending on how large that capital gains is, it can drag along the interest and dividends to also be subject to the 3.8% NIIT

I assume this will be a 2023 transaction?  You referenced the increase in 2025 of your Medicare premiums (IRMAA).  IRMAA is set based on your MAGI two years back, so 2023 income affects 2025 IRMAA.

[april4mar]

NCperson, thank you very much.  Got it.