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Financial Planning / Tax Strategies
|Subject: Re: Tax Q&A 3/5/98 - Schedule D||Date: 3/8/1998 6:09 PM|
|Author: Travzila||Number: 2502 of 121772|
I've done some more research on this am convinced the calculations for my Schedule D are correct. Why? Because my long-term capital gains all occurred at times that resulted in me using my ordinary income tax rates.
The capital gains tax rates table at http://www.1040.com/97capgns.htm is a handy reference that led to my conclusion, and one to which I shall refer to below.
I had LT gains that occurred before 05/06/97, and as I fell into the 15% income tax bracket, the table shows that 15% is the tax rate for these LT gains.
I also had LT gains that occurred after 07/28/97 that were held more than 12 months but less than 18 months. Again, the table shows that the 15% income tax bracket uses the same 15% rate for computing taxes on these LT gains as well.
Roy Lewis' (author of the column) check calculation is line 17 = lines 36, 40, 46, and 50. Well, line 36 is for calculating a 10% tax rate (not applicable for me), line 40 is for calculating the 20% rate (not applicable for me), line 46 is for calculating the 25% rate (again, n/a for me) and, lastly, line 50 is for calculating the 28% tax rate (one final n/a for me).
Therefore, Roy Lewis' insistence that net capital gains in line 17 equal the total of lines 36, 40, 46, and 50 as always being true isn't a certainty. If anyone believes my reasoning to be incorrect, I challenge you to prove it with real numbers similar to the circumstances described above.
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