Long Term Capital gain calculation

Forum|Forum|5 years ago
March 27, 2021
3 replies
23 views

I've been trying to get some assistance with the long term capital gain calculations in the Deluxe edition. I'm in the 15% tax tier for LTCG and entered the amount in Box 2a for 1099-DIV which was included in the AGI. When I removed the amount of LTCG my taxes due were reduced more than 15% of the gain, closer to 20%. I had thought all LTCG was a flat 15% tax but the calculations didn't support that. I called the help desk and was on the phone for 2 hours with the action item I would get a call back after they discussed with the programmer but instead got an email my case is resolved and closed. When I called back in today I was told I could "manually override" the numbers, when I replied it's not fixing the problem with the program the support person hung up (or maybe I was unintentionally disconnected to give them the benefit of a doubt).

If other users have Long Term Capital gains reported go back and remove the amount and see if the taxes due drop by the appropriate percentage. 2020 rates are $53-469K 15%, over that 20% for filing jointly.

macuser_22

Alumni - Champ

The rate can be 0%, 15%, or 20%.

To see the calculations print out the "Qualified Dividend and Capital Gains" Worksheet. Or refer to the 1040 li e 16 instructions page 35.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

jyagudaAuthor

Level 2

Thank you for the information. Strictly a math exercise, if I'm in the 15% tier for LTCG tax and my gain is $10,000 I would expect my total tax due to increase $1500 instead it increased $1875. The only variable I changed was adding the long term gain. What am I missing here?

macuser_22

Alumni - Champ

@jyaguda wrote:

Thank you for the information. Strictly a math exercise, if I'm in the 15% tier for LTCG tax and my gain is $10,000 I would expect my total tax due to increase $1500 instead it increased $1875. The only variable I changed was adding the long term gain. What am I missing here?

I cannot see your tax return to give an answer. Print the worksheet and the calculations will tell you.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**