Capital gains tax rate?

[mondojeepin]

I sold stock this past year, and had capital gains of $183,740.  This sale was considered long-term, and when I put the number into Turbo Tax the effective tax owed came out to $34,544, which I calculated at 18.8%.  Based on my income and the capital gains I profited from the sale, I assumed I would pay a 15% capital gains tax.  Is that not the case?

[fanfare · Accepted solution]

"Is that not the case?"

Not at that level of income.

Do you print and review your tax return before submitting it? You should.

There is a  net investment income tax surcharge of 3.8% on some or all of that gain.

[SweetieJean]

Any increase in income can also lower or eliminate some deductions/credits.

Are you receiving Social Security benefits?  More of them may have become taxable.

Also see this re the Net Investment Income Tax:

Net Investment Income Tax | Internal Revenue Service (irs.gov)

[mondojeepin]

Dang.  The net investment income tax is the difference, I was unaware of that.  Bummer.  Thanks for letting me know, that makes sense (the +3.8% on top of the assumed 15% for a total of 18.8%).

[Mike9241]

when investment income exceeds a certain level there's an additional 3.8% medicare tax look for form 8960

[dcskim]

I've a total adjustable income is 168k, which include long term capital 16k, and i thought the first 40k capital gain is 0% tax rate, however with turbo tax with or without this 16k the tax diff is $2,384. Can any one share their thought? Thanks

[RobertB4444]

@dcskim  That 0% long term capital gains rate is based on your total income.  If your total income is below $40,400 then your long term capital gains rate is 0%.  Between $40,400 and $445,850 it's 15%.  $16K times 15% is $2400.  TurboTax is calculating correctly.

Here's a guide to the capital gains rate.

[dcskim]

RobertB4444

   Thanks you very much, this really clear my doubt.