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Author: ahnuld One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121571  
Subject: Tax bracket- computed before or after cap gains? Date: 11/5/1999 11:25 PM
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Let's say, for simplicity's sake, that your yearly salary is $1000 and thus you are in a low tax bracket (call it 15%, even if it's zero).
Now let's say you incur $40,000 in short-term capital gains. Is that $40,000 taxed at 15%? Or is it first added to your regular income, for a total of $41,000, and then your tax bracket is computed (which would result in, say, a 28% bracket instead of 15%)?
Thanks for any leads. I'm guessing I know the answer but the Fool just posted an article and said that they don't know the answer to this question- although that was for the new cap-gains tax rules coming into effect in 2001, not the current ones.
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