If my only income is Long term capital gains, can I claim deductions against it?

[ghirakami]

I am married filing jointly and have LT Capital gains of $100K, but no other income.  Do deductions ($25K in total) apply to my LT Capital gains income which would put me in the 15% tax bracket and therefore I would not have to pay any Federal Taxes?  Deductions are:
1. Personal Exemptions = $16K (family of 4)
2. Itemized: Mortgage interest = $5K
3. Itemized: Property Tax = $4K
What is my AGI in this scenario?
Which deductions would apply and not-apply?  What about other deductions in question against this scenario like Donations, Sales Tax and Health Care costs (including premiums) above 10% of AGI?

[SweetieJean]

Does your spouse have any income?

[TaxGuyBill]

Yes, you can claim all allowable deductions, such as your Exemption and your Standard Deduction (or Itemized Deductions).

Yes, sales tax, charitable donations, and medical costs in excess of 10% of your AGI would be Itemized deductions.  As Critter points out, if your total Itemized deductions are larger than your Standard Deduction, that would give you a larger deduction.

Your AGI is $100,000.  That comes before your exemptions and Standard Deduction/Itemized Deductions.

If your total "taxable income" (Line 43 of your Form 1040, which is AGI minus exemptions and Standard Deduction/Itemized deductions) falls in the 15% tax bracket, all of your capital gain will be taxed at 0%.  If your "taxable income" is above that, only the portion that is above the 15% 'regular' tax bracket will be taxed at the long-term capital gain rate of 15%.

If you live in a State that has income tax, most States tax long-term capital gains at regular rates.

[Critter]

So far you don't have enough itemized deductions to use them ... the standard deduction for marrieds is $12600 

https://ttlc.intuit.com/replies/3302335

[Hal_Al]

AGI                                     $100.000

Standard deduction             -  12,600

4 Exemptions                         -16,200

= Taxable Income                $  71,200

The 15% tax bracket tops out at $75,900, of taxable income,  for married Filing Jointly. Since your taxable income is less than that and consists entirely of long term capital gains, it will all be taxed a 0%. You will owe nothing, but still have to file a tax return.

[SweetieJean]

and remember your state return!

[Judge Wyld]

Thanks for highlighting the Couples Marriage TAX Advantage. Households next to each other have people who worked hard to live in the neighborhood. Certainly a household of 1 does not have expenses that are only half of a household of 2. Clearly the income of a couple wasn't earned any MORE desperately than the same income EARNED by the Single. Why are Singles targeted with the Singles Income Tax Penalty. The Singles Tax Penalty is egregious in the Standard deduction tax shelter of TWICE the money for couples living next door to Singles. The retirement condition of living on capital gains prescribes that a Single must live in shambles to get a 0% capital gain tax on under 40K adjusted. A couple can live nicely on 100K a year capital gains and subtract 24K$ standard deduction to get under 80K$ for 0% ZERO PERCENT capital gains tax. Singles who saved money to have 80K$ yearly in capital gains MUST be allowed to keep the same amount of the same type of income as the household next door. This sidebyside household comparison also creates treatment equity issues for the rescue checks that went out to married households but not to the Single who lives next door. Think how much lower the national debt would be on the couples' kids and grandkids if they paid the grandparents and parents paid the same taxes as the Single person next door.

[ghirakami]

Same question,  but for this tax year

[DoninGA]

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@ghirakami wrote:

Same question,  but for this tax year

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Standard deductions for 2020

Single - $12,400 add $1,650 if age 65 or older
Married Filing Separately - $12,400 add $1,300 if age 65 or older
Married Filing Jointly - $24,800 add $1,300 for each spouse age 65 or older
Head of Household - $18,650 add $1,650 if age 65 or older

2020 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households

Rate	For Single Individuals	For Married Individuals Filing Joint Returns	For Heads of Households
10%	Up to $9,875	Up to $19,750	Up to $14,100
12%	$9,876 to $40,125	$19,751 to $80,250	$14,101 to $53,700
22%	$40,126 to $85,525	$80,251 to $171,050	$53,701 to $85,500
24%	$85,526 to $163,300	$171,051 to $326,600	$85,501 to $163,300
32%	$163,301 to $207,350	$326,601 to $414,700	$163,301 to $207,350
35%	$207,351 to $518,400	$414,701 to $622,050	$207,351 to $518,400
37%	$518,401 or more	$622,051 or more	$518,401 or more
Source: Internal Revenue Service

Personal exemptions were removed from the Tax Code after tax year 2017.

[pcollinsca47]

You should try that situation on TurboTax. You should find that the first chunk of your capital gains may be taxed at 0% but the amount over the 0% bracket limit (in 2022 about 41k if single or 83k married) will be taxed at 15%.

TTAX 2022 gives a tax of about $6544 for a single person, standard deduction and $100,000 long term capital gain:

  (100,000 - 14700 - 41625) * .15

This should be a little lower in 2023 with increases in the standard deduction and the 0% bracket.

(TTAX 2023 doesn't do stock sales yet (Dec 23) so I've used TTAX 2022 here)