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.PhilRule Your Retirement Home Fool
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