Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< I'm doing this part "Computation Using Maximum Capital Gains Rates" (confusing to say the least!) and cannot figure out where in lines 19-54 the maximum long term capital gains rate comes into the computation. Any experts in this area who could explain this computation? >>

I find picking at my eye with a sharp stick far more amusing than trying to understand Part IV of Schedule D, but to each his own.

The maximum rate is playing on lines 37 and 41. The break between the 15% and 28% ordinary income brackets is playing on line 29. The IRS forms person who had to translate the law into a form that would accurately calculate your tax is probably playing with stuffed animals in a rubber room.

All kidding aside, the best thing to do is start at line 17 (not a typo--lots of people go astray by not fully absorbing the instructions at line 17) and do EXACTLY what it says. Being all in favor of expanded knowledge, I'll also suggest that it's easier to see how this is working if you look at the calculation worksheet on page 32 of the 1040 instructions. It's the maximum cap gains rate without all the exceptions that had to be included in Part IV of Schedule D.

Phil Marti
Tax Preparer
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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.