Is the Long Term Capital Gains rate pro-rated?

[User ID 912021]

I understand that the long term Capital gains rate on stock sales is 0% when the tax payer is in the 15% tax bracket or less.

My question is:

Let’s say the taxpayer has $30,000 in long term cap gains and they are just barely into the 25% tax bracket.  Is all of that $30k in cap gains taxed at 15% or do they get a portion of the $30k cap gains taxed at 0% and a portion at 15%?

I realize that Turbo Tax will do the calculation for me but I am asking more from a tax planning point of view.

Thanks.

[KenH1 · Accepted solution]

Both the regular income tax rates and the capital gains rates are "bracketed," meaning only the amounts above each threshold are at the higher rate (otherwise you would take one step forward, two steps back if you barely entered a new bracket).