Capital Gains and Tax question

[melissaforpeace315]

I sold stocks in 2024 (via my taxable brokerage) that resulted in roughly $13k in cost basis, I'm guessing that this means that I made 13k from this sale? My question is does this 13k added on top of my annual salary (from W-2) to arrive at the tax rate set by the IRS? I reviewed the IRS site: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024

Does this mean that my 13k will be used to calculate my tax rate? Or is the tax rate listed in that above IRS link only for my W-2 income from employment? If the 13k is added on top of my income (which falls in the 22% tax bracket), then I'm assuming that I will be taxed 22% of 13k right?

Thank you so much in advance!

[Mike9241]

you are not taxed on the cost basis. you're taxed on the gain which is sales price less tax basis. in addition, what tax bracket you are in will depend on whether the gain is short-term or long-term. short-term is treated like salary so that will push up your marginal tax bracket. There are special tax brackets for long-term gains depending on other income. there isn't one tax bracket based on your income. tax brackets are graduated

is sort of like steps. For example; taxable income from a to b is taxed at 10%, taxable income from b to c is at 12%, the next ranges are taxed at 22%, then 24%, etc. so at say $90K of taxable income a portion would be tax at 10% the next portion at 12% and the final portion at 22%. these are JUST EXAMPLES. also as noted long-term capital gains get a special rate that depends on your other income.