Not trying to be pedantic, but there really is no such thing as the 20% LTCG bracket. When you reach the 20% LTCG bracket, you have long since passed the $200k (S)/$250k (MFJ) MAGI limit that incurs the NIIT 3.8% surcharge. You will pay 23.8% on all your gains above the 15% (really 18.8% at that point) bracket.[Topic is now in Personal Finance (Not Investing) - mod mkc]
Do your long term capital gains when sold/realized count on your income bracket and therefore for tax purposes? For example (hypothetical), if my income for the year is less than $550k (below the 20% theshold for ltcg) and if I sell my long term capital gains that are $50K, does that factor into my income and push me into the 20% theshold?
LTCG always floats on top of ordinary income, like oil on water in a test tube. Adding extra water (OI) makes the oil (LTCG) rise, potentially increasing taxes on both types of income.
The opposite is not true- adding more oil (LTCG) has zero effect on the water (OI) beneath.
Statistics: Posted by Navillus1968 — Tue Dec 19, 2023 12:27 am — Replies 7 — Views 686