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With the Bush tax cuts extended it is my understanding that the LTGC for 2012/2013 tax years will continue to be taxed at 0% for taxpayers in the 15% marginal tax bracket using the same methodology used in tax year 2011. Is this correct?

TIA
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Is this correct?

Yep. Pretty much.

Keep in mind the 0% rate applies only to the extent that the capital gain would have been taxed at 15% or less. Once the capital gain pushes you through the 15% bracket into the 25% bracket, the amount in the 25% bracket is taxed at 15%.

So your $1 million long term capital gain is not going to be tax free just because you don't have any other income. (But some part of it would be!)

--Peter
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With the Bush tax cuts extended it is my understanding that the LTGC for 2012/2013 tax years will continue to be taxed at 0% for taxpayers in the 15% marginal tax bracket using the same methodology used in tax year 2011. Is this correct?

Yes and no. The rate statement is correct. However, this rate was made permanent, not just extended for a limited time. Of course, permanent in tax law just means it has no predetermined expiration. Permanence is in the pens of Congress and the President.

Phil
Rule Your Retirement Home Fool
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Thanks for the quick replies Peter & Phil.

So your $1 million long term capital gain is not going to be tax free just because you don't have any other income. (But some part of it would be!)

--Peter


Yeah, sure, right.(lol) I always do enjoy your sense of humor Peter ;)

Rich
Arizona
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