Message Font: Serif | Sans-Serif
No. of Recommendations: 0
it looked like all of the long term gains dropped out before the value was added back into your normal income.

none of your LT capital gains will "contribute" to your "wages income" which is taxed according to your marginal "tax bracket."

however, all of your (net) LT capital gains DO contribute to your total AGI (adjusted gross income) which is used to determine which Tax Bracket you fall into.

So... your LT cap gains are all taxed at the LT cap gains tax rate, but your wages-income/ST cap gains are taxed at rate that DOES depend on the amount of LT cap gains reported on the same 1040.

Clear ?

- D
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.