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Level 2
June 6, 2019
Solved

Why are long term capital gains rate 19%, but my income is in the 15% bracket. Test...modified my LT gains then divided the difference-in-tax by the difference-in-gains.

  • June 6, 2019
  • 3 replies
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Our married, joint income was less than $400,000 which put us in the 15% bracket for long term capital gains. However when I tested modifying my LT capital gains by several thousand and calculating the rate, by dividing the difference in tax by the difference in gains, the rate came out to nearly 19%.  Please explain.

Best answer by Zbucklyo

The Net Investment Income Tax of 3.8% - given your income.  Schedule 4, Line 62.

3 replies

Critter
Level 15
June 6, 2019
You need to look deeper ... at that income level you are almost surely subject to the extra investment tax .... you are using the downloaded version so switch to the forms mode and look at the return before and after the addition of that income.
Level 2
June 6, 2019
I see now, the net investment income tax of 3.8% applies.  Thank you.
ZbucklyoAnswer
Level 8
June 6, 2019

The Net Investment Income Tax of 3.8% - given your income.  Schedule 4, Line 62.

Level 2
June 6, 2019
Thank you.  I wasn't aware of this before.