TurboTax and Capital Gains Calculation

[cjponto]

My understanding is that long term capital gains are added to total income. Then, after the tax on adjusted gross income is calculated, the tax on the capital gains is computed separately and added to the AGI tax. My understanding is that it is done this way because portions of the capital gains may be calculated at different tax rates. Is this correct? If it is correct, it appears to me that capital gains are taxed twice- once in the AGI calculation and then again during the separate capital gains tax calculation. What am I misunderstanding?

[AnnetteB6]

You have the basic idea.  The missing piece is that in the end, the total tax calculation using the gains added to other income is compared to the tax calculation using the graduated capital gains rates and the lesser tax amount is used on your return.

The worksheet used to calculate your taxes when taking capital gains into account is found in the IRS Instructions for Form 1040.  It is called the Qualified Dividends and Capital Gains Tax Worksheet. 

You can find it on page 33 of the PDF document at this link:  2019 Form 1040 Instructions

[cjponto]

Annette, thank you for the prompt reply. "The missing piece is that in the end, the total tax calculation using the gains added to other income is compared to the tax calculation using the graduated capital gains rates and the lesser tax amount is used on your return." That answers my concern about double taxation and I was not aware of the Qualified Dividends and Capital Gains Tax Worksheet which shows the calculation. I have since located this form in my TurboTax output. Thanks again!