Long Term Capital Gains Rate

[stickman7]

I understand that Long Term Capital Gains are included in AGI, which in turn determines the LTCG tax rate. I'm married filing jointly, so the 15% rate begins at $89,250 of taxable income.  So, if my ordinary income is $75K, and I have $20K of LTCG, that pushes me over the $89,250 threshold.  Is all of my LTCG then taxed at 15%, or just the amount that exceeds $89,250, i.e. $5,750?

[rjs]

Only the amount that is over the threshold is taxed at the higher rate.

[rjs]

The $89,250 threshold is for 2023. For 2022 the 15% rate for long-term capital gain begins at $83,350 for married filing jointly.

[dmertz]

In this example of 2023 income, and assuming that taxable income is $95,000, $14,250 of LTCG would be taxed at 0% and $5,750 would be taxed at 15%.  If AGI is $95,000, taxable income would be below $89,250 and all of the LTCG would be taxed at 0%.

[stickman7]

Thank you, this was what I was hoping would be the case.

[stickman7]

Thanks for the clarification.  I should have specified "taxable income"  instead of AGI.

[NCperson]

@stickman7 - use this website and you can see your questions and the answers play out: 

https://www.dinkytown.net/java/1040-tax-calculator.html