I am in the 15% tax bracket for my ordinary income and I made $100,000 worth of capital gains from selling stock. How would I be taxed if these were all short term gains or all long term gains? Does this increase my ordinary income tax rate? Would I still be taxed capital gains tax of 15% short and 0% long or does this large amount affect my regular tax rate?Thanks
Do not double post. You have plenty of answers in the other board.
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If they are ALL long term gains, then EVERYTHING is taxed at 15%. If they are ALL short term, then it is taxed marginally just as if you had $100,000 of income from a job. Yes, the short terms gains WILL bump you into higher tax brackets.
Long-term gains do not affect your ordinary income tax rate. Your short-term gains and your ordinary income are taxed at whatever rate would have applied if your short-term gains had been ordinary income. If they were all short-term gains, then you would be taxed the same as if all your income was ordinary income. The amount of long-term gains that are taxed at 0% is limited to the amount of ordinary income that you could have and still be in the 15% bracket, minus the amount of ordinary income that you did have. For example, if you have $15,000 each in ordinary income, short-term capital gains, and long-term capital gains, for a total of $45,000 and the maximum amount of ordinary income that you could have and still be in the 15% bracket was $40,000 (not the real figure), then you would (1) subtract $40,000 from $45,000 to determine the amount of long-term gain taxed at 15% was $5,000, (2) pay 0% on the other $10,000 of long-term gain, and (3) on the short-term gains and ordinary income, pay whatever your tax would have been if you had $30,000 in ordinary income and no capital gains.
