long term capital gains question.

Forum|Forum|4 years ago
February 22, 2022
4 replies
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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

Level 15

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

Level 15

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.)

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sujiAuthor

Level 2

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

Level 15

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.

TomKeese

Level 2

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

PattiF

Level 15

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:

Open (continue) your return in TurboTax.
In the search box, search for investment sales then select the Jump to link in the search results.
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.
Select Other then Continue.
On the next screen, select the type of sale you had (like second home, collectible, or land) and Continue.
Continue following the onscreen instructions to enter the sale.