Capital gains seems wrong

Forum|Forum|6 years ago
February 27, 2020
6 replies
65 views

Line 6 on 1040 says capital gains are $6,177

Schedule D line 8b says long term capital gains are -$37 which reflects two investment sales.

BUT, line 15 says net long term capital gains are $6,177 which goes to line 6 on 1040

I did have some taxable distributions from IRA's and those show up on line 4b on 1040

Form 8949 shows gains as -$37

I simply cannot understand where that capital gain of $6177 comes from.

Any help out there? Thanks.

Best answer by JulieS

The amount on line 15 of Schedule D includes:

Long term capital gains or loss.
Gains from Form 4797, Part I (sales of business property)
Long term gains from installment sales.
Long term gains from Forms 4684, 6781, and 8824.
Long term gains from K-1 forms.
Capital gains distributions from 1099-DIV, box 2a.
Capital loss carryover from prior years.

The easiest way to figure it out is to check boxes 11, 12, 13 and 14 on Schedule D. The two most overlooked items are gain from business property, which can be just trading in a car used for business; and capital gain distributions from 1099-DIV.

JulieSAnswer

Level 15

The amount on line 15 of Schedule D includes:

Long term capital gains or loss.
Gains from Form 4797, Part I (sales of business property)
Long term gains from installment sales.
Long term gains from Forms 4684, 6781, and 8824.
Long term gains from K-1 forms.
Capital gains distributions from 1099-DIV, box 2a.
Capital loss carryover from prior years.

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Matthew0304

Level 2

My issue is pretty simple. I'm trying to see how my capital gains rate is 0%. My wife and I are well below the taxable income of $80,000 (more like 36,000). We had $14,003 in long term capital gains. TurboTax figured our tax to be $1796. Then I went back and changed the basis of our stock sales to render a zero ($0.00) long term capital gain, to see what would happen. I changed nothing else. With this the only change, TT figured our tax to be $613. Taxable income was significantly lower. How can this be, if we are supposed to be paying 0% on capital gains? Is TurboTax wrong?

JohnB5677

Level 15

I did this calculation using multiple scenarios, and TurboTax seems to handle it well. The form that the calculation ids done on is Qual Div/Cap Gn.

As a married couple the benchmark earnings is $80K. If you have earned income less than $80K, and you have Long Term Capital Gains. A portion or all of the LT Capital gain will incur zero tax.

Example: A married couple has an income of $85,000 from wages, social security, retirement income etc. They also have $25,000 of long term capital gain.

On you tax form 1040: