Long Term Capital Gains

[ExpatLife1]

Hi folks, 

Gaming out the 2021 tax year. Let me know what I'm doing wrong here -

• Married filing jointly
• AGI projected at around 25,000 (due to FEIE + rental loss) 
• Assume standard deduction of 25100
• Assume no other deductions, so taxable income = 0
• So - I could technically sell stocks to the tune of 60,000 in long term capital gains, if I wanted, and that should result in no added tax liability because total taxable income would be under 80,800 and so long term capital gains tax is 0% for the entire amount. 

Is this correct? 

• If not --> why not?
• If yes --> then why, when I game it out on Turbotax 2022, federal tax due is 0 until I add the 60,000 in long term capital gains, and then it jumps to 4750
  • Note: 1099-B for Turbotax 2022 is not ready so I've been adding it under capital gains in 1099-DIV. 

[Critter-3]

NOT ... the FEIE is added back to the income for the cap gains calculations ... look at the worksheet on page 16 ... line 1     https://www.irs.gov/pub/irs-dft/i1040sd--dft.pdf

If you are using the downloaded program switch to the FORMS mode to see the calculations.  If you are using the ONLINE version you will need to pay for the program to see the worksheets in the Print Center. 

 

[ExpatLife1]

Fantastic - thank you!