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huns
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If I have 200K in capital gains, but have previously been in a 10% bracket, does my tax bracket increase?

 
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3 Replies

If I have 200K in capital gains, but have previously been in a 10% bracket, does my tax bracket increase?

For 2017, or for 2018?
rjs
Level 15
Level 15

If I have 200K in capital gains, but have previously been in a 10% bracket, does my tax bracket increase?

Yes, your tax bracket is based on all your taxable income, including capital gains. The $200,000 will actually span several brackets. (The exact income amounts in each bracket depend on your filing status.) If it's long-term capital gains, the portion that falls in each bracket will be treated according to the bracket that it falls in. Your ordinary income goes in the lowest bracket, and the long-term capital gains are "stacked" on top of the ordinary income, so the long-term capital gains go in the higher brackets.

Note that the tax brackets apply to your taxable income, not total income or Adjusted Gross Income (AGI).

If I have 200K in capital gains, but have previously been in a 10% bracket, does my tax bracket increase?

Remember your State taxes as well.
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