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ken31
New Member

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%?

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.

1 Best answer

Accepted Solutions
TaxGuyBill
Level 9

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%?

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%).

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6 Replies
TaxGuyBill
Level 9

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%?

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%).

View solution in original post

SweetieJean
Level 15

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%?

Assuming no 2017 tax law changes.
fanfare
Level 15

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%?

[ -- -- ]
fanfare
Level 15

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%?

OK please ignore my post. I misread the total wages involved. Sorry.
TomD8
Level 15

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%?

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

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

SweetieJean
Level 15

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%?

State taxes may be different.
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