The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Very basic capital gains tax question.||Date: 12/22/2010 2:11 AM|
|Author: TMFPMarti||Number: 111699 of 122916|
Suppose I sell stock for a long term capital gain of $100. I pay the 15% capital gains tax ($15).
Am I done paying taxes on that money? Or does this $100 (now $85) then get taxed as part of my annual adjusted gross income according to my current tax bracket?
It gets taxed once and at the special rate, but not in the way I think you think it does. Nothing happens regarding taxes at the point of sale. You report your sale on Schedule D of that year's 1040, which flows to line 13 of the 1040, where the gain becomes part of AGI. When you get to the point of calculating tax you use a special calculation worksheet that takes into account the special rate for LTCG.
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