Long Term Capital Gains and AGI

[taxdoofus]

I sold some stocks in 2024 after holding for more than 1 year and had long term capital gains (LTCG) of ~$86k.

Does this get added to my AGI and push me in the higher income tax rate for regular income?

How is normal/regular income taxed if LTCG puts you in a higher tax bracket?

My filing status is married filing jointly and assuming all deductions in the following:

> Projected 2024 W2 regular income is ~$401k (after std deduction, 401k, medical and HSA)

> Anticipated 2024 income from rental property is ~$17k after QBI and depreciation.

> Other taxable income from trading (ST), interest and dividends estimated to be ~$10k

== Est. Total Regular Income = ~$428k
LTCG = ~$86k

Finally, will the LTCG impact child tax credit?

[Mike9241]

yes LTCG gets added to other income and thus pushes LTCG into higher tax brackets. If you search the web there are various tax calculators available for 2024.

There is no AGI limit on who can claim the credit if they qualify. Rather AGI determines the %. For 2023, AGI from $43K to unlimited has a 20% rate so your 2024 rate will be 20% 

[fanfare]

Recall that the income tax is progressive. only additional income is taxed at potentially higher rate.

@taxdoofus 

[TomD8]

@taxdoofus --

Your total taxable income includes your capital gain.  Using the figures from your post, your total taxable income for 2024 would be $428K plus $86K, or $514K.

The non-LTCG portion of your income would be taxed as ordinary income.  (Thus your LTCG income cannot push you into a higher ordinary income tax bracket.)  For 2024, the LTCG portion of your income would be taxed according to this table: 

The brackets are based on total taxable income including the LTCG.

Rate	Single	Married Filing Jointly	Married Filing Separately	Head of Household
0%	$0 – $47,025	$0  – $94,050	$0 – $47,025	$0 – $63,000
15%	$47,025 – $518,900	$94,050 – $583,750	$47,025 – $291,850	$63,000 – $551,350
20%	$518,900+	$583,750+	$291,850+	$551,350+

For 2024 an MFJ taxpayer with total taxable income of $514K would pay a tax rate of 15% on the LTCG portion of his income.

High earners may also be subject to the Net Investment Income Tax (NIIT) of 3.8% on their capital gains, depending on their filing status and income level.  This web article explains:

https://kahnlitwin.com/blogs/tax-blog/net-investment-income-tax-what-you-need-to-know-for-2024