Long term capital gains tax

[sanjosegoodguy]

Hello All,

My taxable income on line 15 is $42960. If the LTCG tax is $0 up until $96700 for married filing jointly why does Turbo Tax show me owing more in federal tax when I enter any capital gains up to that amount?  I was trying to see how much more I could pull out of stock without incurring additional tax and was blindsided by this increase in tax.  Thanks ahead for any words of wisdom.

[VolvoGirl]

Note that the tax brackets for long-term capital gain are based on your total taxable income, including both the capital gain and all other taxable income. For 2025 taxable income is on Form 1040 line 15.

And see this post

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/scheduled/00/3738248

[sanjosegoodguy]

Thanks for trying to help but I did have line 15 for taxable income and it is way below the threshold for the 15% bracket so when I add in the stock sale it should still not be taxed. Is there more than one way to enter the stock sale? It is entered as a LTCG in the proper section.

[dmertz]

Your LTCG sits on top of your income that is taxable as ordinary income, so the $96,700 of 0% LTCG bracket  is reduced by the amount of ordinary taxable income.  If you see than any amount of LTCG you enter is taxable, it means that you have at least $96,700 of income that is taxable as ordinary income, pushing all of your LTCG above the 0% LTCG bracket.