The tax rate that you pay on a long-term capital gain is determined by your total taxable income, including the gain.
The gain will always be included in the income shown on your tax return, even if part or all of the gain falls in the 0% tax bracket. The only way to see what tax rate is being applied to the gain is to look at the Qualified Dividends and Capital Gain Tax Worksheet, where the tax is calculated. In order to see that worksheet in TurboTax Online you have to print your tax return with all forms and worksheets. You have to pay the TurboTax fees before you can print.
Deductions do not reduce your AGI. But the tax brackets are based on taxable income, not AGI. Deductions do reduce your taxable income. Taxable income is basically AGI minus deductions. For 2019, taxable income is on Form 1040 line 11b.
A capital gain is not necessarily all taxed at the same rate. It could straddle the bracket boundary, so that some of the gain is taxed at 0% and the rest of it is taxed at 15%. Again, the calculation is done on the Qualified Dividends and Capital Gain Tax Worksheet. See my post at the following link for a detailed explanation of how the tax brackets apply to a long-term capital gain. The taxpayer in that post is filing as single, not jointly, so the bracket limit is much lower, but the principles are the same.
long term gain tax rate calculation for 2020
Was the home that you sold your principal residence? If so, did you check to see whether you qualify for the $500,000 exclusion of gain? When you enter the sale in TurboTax as the sale of your home, it will ask you questions to determine whether you qualify for the exclusion. If you do, up to $500,000 of the gain will not be included in your income at all.
