My wife & I file joint return. we earn $45K per year. If we sell $100K mutual funds that we purchase 5 years ago for $50K will our long term capital gain be 0% or 15%?

[ken31]

The reason I ask is because my broker said that if the long term capital gains( $50K) on the sale along with our $45K salary took us above $75,900 that our capital gains would go from 0% to 15%.  I have never seen this mentioned before in the discussion of capital gains.

[TaxGuyBill · Accepted solution]

It would be taxed at 0%

Your total income would be $95,000.  After the Standard Deduction and your personal exemptions, your "taxable income" would be less than $75,000.  That would put all of the gain in the 0% capital gain bracket (the 'regular' tax bracket of 15%).

[SweetieJean]

Assuming no 2017 tax law changes.

[fanfare]

[ -- -- ]

[fanfare]

OK please ignore my post. I misread the total wages involved. Sorry.

[TomD8]

Your broker is correct.  The maximum taxable income on a joint return for the 0% capital gains rate is $75,300.  (2016) 

This web reference might help explain:  http://www.bankrate.com/finance/taxes/capital-gains-tax-rates-1.aspx

[SweetieJean]

State taxes may be different.