long term capital gains question.

[suji]

Lets say I have 200$ long term gain and 100$ short term gain

I believe long term capital gains are taxed separately then short term gains, where is this reflected in forms. In form 1040 , I see in Line 7 its added as 300$ and Interest is calculated based on my w2 wages(say 1000$) + 300$? Where do I see that tax is getting calculated different for 200$?  Appreciate your help. 

[Mike9241]

not quite correct. before you get the LTCG rate your net short-term losses must be netted with your net LTCG. in your case, you only have $100 of net LTCG.

you need to review the qualified dividend and capital gain worksheet. 

[DawnC]

Your long-term gains and short-term gains are netted on Schedule D.   If you have $200 LT gain and $100 ST gain, you have a net capital gain of $300.   You should see that amount on Line 7 of your Form 1040.   If you click on Forms at the top, find Schedule D in the forms list.   It will show your short-term and long-term gains and then in Part 3, it nets them together.   Scroll down to the bottom of the page and you can click on Quick Zoom next to the Schedule D Worksheet and Qualified Dividend and Capital Gain Tax Worksheet to see the details of the tax calculation for capital gains tax.

The tax rate you pay in 2021 depends on whether your net gain is short-term or long-term.

• Short-term profits are taxed at your maximum tax rate, just like your salary, up to 37% and could even be subject to the additional 3.8% Medicare surtax, depending on your income level.
• Long-term gains are treated much better. Long-term gains are taxed at 15% or 20% except for taxpayers in the 10% or 15% bracket. For low-bracket taxpayers, the long-term capital gains rate is 0%. There are exceptions, of course, since this is tax law.
• Long-term gains on collectibles—such as stamps, antiques and coins—are taxed at 28%, unless you're in the 10% or 15 % or 25% bracket, in which case the 10% or 15% rate or 25% rate applies
• Gains on real estate that are attributable to depreciation—since depreciation deductions reduce your cost basis, they also increase your profit dollar for dollar—are taxed at 25%, unless you're in the 10% or 15% bracket.
• Long-term gains from stock sales  by children under age 19—under age 24 if they are students—may not qualify for the 0% rate because of the Kiddie Tax rules. (When these rules apply, the child’s gains may be taxed at the parents’ higher rates.)

[suji]

Thanks Mike and Dawn. Sorry if my question was not clear. I am looking to understand how the tax is calculated based on net capital gain. Form 1040 reflects that Total Income and then Tax due based on that income. Capital gains are included in total income so want to see how TT is calculating the taxes differently for the capital gains ? is there a form /worksheet I can look at? Schedule D only shows net gain and loss but don't reveal tax from the capital gain or loss

( I am trying to figure out smart zoom to see the capital tax worsheet ).

[VolvoGirl]

The tax will be calculated on the Qualified Dividends and Capital Gain Tax Worksheet.  It does not get filed with your return. 

In the online version you need to save your return as a pdf file and include all worksheets to see it.

For the Desktop version you can switch to Forms Mode and open the worksheet to see it.  Click Forms in the upper right (upper left for Mac) and look through the list and open the Qualified Dividends and Capital Gain Tax Worksheet.

[suji]

Hi Volvo, I am using premier online version and I have downloaded TaxReturn (with goverment and TT forms). Where do I look at this tax work sheet as I am not able to figure yet. 

is smart only an option on TT online version? I am trying to figure the forms view from TT online but no luck. 

[VolvoGirl]

Do you have the Qualified Dividends and Capital Gain Tax Worksheet?  I don't know how it works out but it's on that.

[suji]

I see  Qualified Dividends and Capital Gain Tax Worksheet in the forms. Thanks guys. Where do I find the Tax Computation Worksheet?

[VolvoGirl]

I think that's it.

[suji]

Thanks VolvoGirl and everyone.  🙂

Is the Tax Computation Worksheet included with TT forms or do I need to look online

[DawnC]

Yes, if the Tax Computation Worksheet was used to calculate your tax, it will be included with your tax return.   If you look on the 1040/1040-SR Worksheet, you see your taxable income on Line 15.  Right below that, you should see the Tax Smart Worksheet that shows what worksheet was used to calculate the amount on Line A.    In my example below, there is an X on the Schedule D Tax Worksheet line, so I would need to look at that worksheet (Schedule D Tax)  to see the details of the calculation.  

An X on the first line (1-Tax table) implies no capital gains tax.  In that case, your tax was found in the IRS tax table for your filing status and taxable income on Line 15.   If you have any other lines with an X, the referenced worksheet or schedule will be included with your return.  

[LWChan_5039]

I'm confused with your example of both Long Term and Short Gains of $300 is entered fully on Line 7 on Form 1040.  If TP is in the 15 % Cap Gains tax bracket of MFJ incomes of $80,001 to $496,600, shouldn't it be $100 ST as ordinary income plus $30 LT ($200 x 15%= $30) or $130 entered on line 7 on Form 1040 ? 

[ThomasM125]

Line 7 on form 1040 just reports the net capital gain. How it is taxed is calculated on the Qualified Dividends and Capital Gains Tax Worksheet. 

@LWChan_5039

[TomKeese]

How do I enter long term capital gains from a private trNSACTION?

[PattiF]

You will need to enter this in the investment section of TurboTax. 

When you sell stocks, bonds, mutual funds, or other securities, you should get Form 1099-B from your brokerage by mid-February. Simply enter the form into TurboTax to report the sale.

But what about non-security investment sales like coins, collectibles, timber, land, or a second home? Here's how you enter those:

1. Open (continue) your return in TurboTax.
2. In the search box, search for investment sales then select the Jump to link in the search results.
3. Answer Yes to the question Did you sell any of these investments in 2021?
   • If you land on the investment sales summary screen, select Add More Sales.
4. Select Other then Continue.
5. On the next screen, select the type of sale you had (like second home, collectible, or land) and Continue.
6. Continue following the onscreen instructions to enter the sale.