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GGME
Level 2

Long-Term Capital Gain

In what situation the Long-Term Capital gain can be taxed at Standard Tax Rate but not at 15% Rate?

 

1 Best answer

Accepted Solutions
tagteam
Level 15

Long-Term Capital Gain

The net capital gain tax rate is capped at 20% with the following exceptions:

 

  1. The taxable part of a gain from selling section 1202 qualified small business stock is taxed at a maximum 28% rate.
  2. Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.
  3. The portion of any unrecaptured section 1250 gain from selling section 1250 real property is taxed at a maximum 25% rate.

See https://www.irs.gov/taxtopics/tc409

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5 Replies
tagteam
Level 15

Long-Term Capital Gain

The net capital gain tax rate is capped at 20% with the following exceptions:

 

  1. The taxable part of a gain from selling section 1202 qualified small business stock is taxed at a maximum 28% rate.
  2. Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.
  3. The portion of any unrecaptured section 1250 gain from selling section 1250 real property is taxed at a maximum 25% rate.

See https://www.irs.gov/taxtopics/tc409

tagteam
Level 15

Long-Term Capital Gain

Note that you also may be subject to the Net Investment Income Tax (NIIT) which adds 3.8%.

 

See https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax

GGME
Level 2

Long-Term Capital Gain

Thanks, thank you CHAMP for confirming that!

tac12us1
New Member

Long-Term Capital Gain

How do I enter "Long Term 28% Sales"

DawnC
Expert Alumni

Long-Term Capital Gain

When you are entering the details of the transaction, there is a place to put a checkmark that the investment was a collectible in the desktop software.   In the Online software, you an choose 'Collectible' from the Sales Type dropdown box.

 

I am assuming you have a collectible, but if it is small business stock (that also get a 28% tax rate), see the notes below.

 

To enter any investment sale, use this link.

 

@tac12us1

 

Qualified Small Business ("QSB") stock describes a few specific stock types that come with special tax benefits.   There are stringent criteria around what qualifies as QSB. TurboTax has your back in calculating the special exclusions and treatment related to QSB stock.   If you have QSB stock (or think you might), please be sure to do the following:

 

 - Enter each sale one at a time (do not choose to input a sales summary)
 - On the follow up screen title "Select any less common adjustments that apply", select the option to indicate this sale is eligible for special treatment because it's from qualified small business stock.
 - After selecting qualified small business stock, just answer the follow up questions to determine whether this sale qualifies as QSB stock eligible for special tax treatment.

 

If you have further questions on QSB stock please refer to the Schedule D instructions: Schedule D

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