topic Why Cap Gains tax? in Investors & landlords

Why Cap Gains tax?

MongoCobra — Thu, 19 Dec 2019 21:47:17 GMT

I'm trying to estimate 2019 taxes for my son who is a single filer. He should have about 20k in earned income and we are deciding whether he should cash in on some long term cap gains on stocks. when i put the numbers into turbotax it is calculating a tax on the cap gains even though there is less than 39k in taxable income. I'm sure there is a box or something that i am missing somewhere because there should be not cap gains. please help

Re: Why Cap Gains tax?

Anonymous_ — Thu, 19 Dec 2019 22:49:19 GMT

@MongoCobra wrote:

...I'm sure there is a box or something that i am missing somewhere because there should be not cap gains.

A box where? Which product are you using?

Are you certain you are not looking at the tax on the earned income rather than the capital gains?

If you are using a desktop version of TurboTax, enter Forms Mode and review the Qualified Dividends and Capital Gain Tax Worksheet. Otherwise, please post additional details.

Re: Why Cap Gains tax?

MongoCobra — Thu, 19 Dec 2019 23:07:26 GMT

Thanks for the reply. I am using Turbotax premier. in order to populate form 1099-B i used the interview to generate 15,000 worth of long term gain. i used a w-2 to input 20,000 in wages and taxes withheld. when i then removed the 1099-b by deleting the form and the refund amount increased, implying that the capital gain was being taxed. I didnt think that there was capital gain tax when the taxable income amount was below 39k

Re: Why Cap Gains tax?

Anonymous_ — Fri, 20 Dec 2019 00:06:07 GMT

@MongoCobra

I did the pretty much the same thing, but the amount of the refund on my test return did not change when I removed the capital gain.

Are you certain you entered the gain as long-term and not short-term?

Re: Why Cap Gains tax?

MongoCobra — Fri, 20 Dec 2019 00:24:06 GMT

yes it was long term. does it matter if they are a student or if the filer can be claimed as a dependent on someone else's return?

Re: Why Cap Gains tax?

Anonymous_ — Fri, 20 Dec 2019 00:47:54 GMT

Yes, that would make a difference if your son did not provide more than one-half of his support.

Re: Why Cap Gains tax?

Anonymous — Fri, 20 Dec 2019 06:46:45 GMT

there apparently is a bug in the program. tried with 15000 ltcg and then 15000 of qualified dividends - got different results - should have been exactly the same. no qualified dividend & cap gain worksheet was generated.

then used 2018 with same info - not much has changed in the way of tax laws, but result i got was completely different

i'm using TT deluxe on PC

Re: Why Cap Gains tax?

Anonymous_ — Fri, 20 Dec 2019 15:48:45 GMT

@Anonymous wrote:

there apparently is a bug in the program. tried with 15000 ltcg and then 15000 of qualified dividends - got different results - should have been exactly the same. no qualified dividend & cap gain worksheet was generated.

That is rather odd because I conducted the same test and got the same results; exactly the same refund amount and the worksheet was generated.

I have TurboTax Home & Business.

Re: Why Cap Gains tax?

Anonymous — Fri, 20 Dec 2019 19:07:24 GMT

i got the desktop version of deluxe

Re: Why Cap Gains tax?

Anonymous_ — Fri, 20 Dec 2019 20:11:49 GMT

@Anonymous wrote:

i got the desktop version of deluxe

The results should be the same across the two versions but, then again, who knows?

All I can report is that I am getting the same, consistent, results with Home & Business with LTCG and then QD; did not make one bit of difference and the worksheet was generated.