Long term capital gain

[Laz]

why is my $13000 long term capital gain being taxed? Total income is $30000. Shouldn't it be zero since it is less than $40000?

[DanaB27]

Yes, the long term capital gains rate is $0 for your tax bracket.

The $13,000 long term capital gain will be included in your taxable income. But the Qualified Dividends and Capital Gain Tax Worksheet is used to calculate the tax if you have qualified dividends or long term capital gains on your return.

You can preview your 1040 and see if the Qualified Dividends and Capital Gain Tax Worksheet was used when you scroll down to the "Tax Smart Worksheet".

To preview Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

[Laz]

Thanks for the reply, DanaB27.  The Qualified Dividends and Capital Gain Tax Worksheet is indeed filled out but the number at the bottom is not carried to line 12a on Form 1040.  How can I force that?

[DanaB27]

Did you have any other tax added on theTax Smart Worksheet?  Does the number appear on line 12 b?  Are you using TurboTax Online? 

[Laz]

ok, I get it now.  This is one of those rare exclusions.  It is for my son who is a full time student between the age of 18 and 24 and who has earned income less than half of living expenses.  Go figure.

[Taxjinhe]

My taxable income (including long term capital gain) is $15,000. My long term capital gain is $13,000. Why does TurboTax still calculate tax on my long term capital gain?