If you are retired and have an income of $30,000 from a pension and have not started to draw off 401k or SS, if you sell $500,000 dollars worth of stock from a taxable account, $50,000 of which is long term capital gains, what capital gains tax bracket are you in? 30,000 (0%)? 80,000(15%)? 530,000(20%)?March 11, 2019 at 8:22 am MST #197474PedsParticipantStatus: PhysicianPosts: 3618Joined: 01/08/2016
part will be zero, the rest 15%.
your basis does not affect your income.DreamgiverParticipantStatus: PhysicianPosts: 733Joined: 03/09/2017
What peds wrote. The 50k growth in the taxable will be taxed mostly as LTCG, STCG for the portion of recent reinvestments (if you did that)March 11, 2019 at 9:17 am MST #197499q-schoolParticipantStatus: PhysicianPosts: 2338Joined: 05/07/2017
Thank you! so essentially capital gains counts as income as far as what tax bracket you end up in?Click to expand…
right. they are not taxed at the ordinary income marginal rate but they do determine what tax bracket your earned income falls into.
i think that’s your question.ENT DocParticipantStatus: PhysicianPosts: 3024Joined: 01/14/2017
Most will be at 0% because of the standard deduction. Did you have no dividends?March 11, 2019 at 9:31 am MST #197512ENT DocParticipantStatus: PhysicianPosts: 3024Joined: 01/14/2017
I would phrase it differently. The pension was the mandatory payment. The decision on the margin was to sell stock. Therefore it’s the pension that is determining the tax rate of the capital gains in this situation. Whether $0 or $50k in CG is made on sale that pension (minus standard deduction) is still getting taxed at the same rate (10%).
For the OP, see the Qualified Dividend and Cap Gains Tax Worksheet in the 1040 instructions. You’ll see how it all relates.March 11, 2019 at 9:36 am MST #197517