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dixiefla
New Member

capital gains

When I entered long term capital gains and short term capital gains into Schedule D (and/or the worksheet) Turbotax combined them--it added the two numbers--and put this total into my 1040 as taxable income.   Long term capital gains are taxed at a lower rate than short term, so why did it combine them so that the long term gains are being taxed at the same higher rate as short term gains?

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1 Reply
LaShaunA3
Employee Tax Expert

capital gains

Even though ‌capital gains  appear combined on the 1040, the lower tax rate for long-term gains is still applied behind the scenes from the worksheet you completed. 

 

Schedule D combines the totals to arrive at total taxable income on Form 1040, but then applies a separate capital gains tax calculation worksheet that taxes long-term gains at lower rates. You can switch to FORMs view and open the worksheet to verify the rates. 

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