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TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 14044
Experience:  15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
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I sold some stock I have had over a year and had capital

Customer Question

I sold some stock I have had over a year and had capital gains. The gain amount was 29,000.00 and that put me in the 10 to 15% tax bracket where it states you would owe zero taxes being it is the only income I had. I would like to know why they said I would owe state 1,500.00 when I am within the limits of the income and the low tax bracket? I live in Kentucky.
Submitted: 10 months ago.
Category: Capital Gains and Losses
Expert:  TaxRobin replied 10 months ago.
HelloKentucky has it's own rates for Capital gains that are separate from federal and how the federal taxes capital gains.While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income. In Kentucky, the uppermost capital gains tax rate was 6 percent. You are required to click a positive rating if I am to be credited with the response.You have to actively click on a rating and click submit. Smiley Faces or Stars.
Customer: replied 10 months ago.
Capital gains rates are designed to encourage long-term investing. Most people can get a significant advantage from holding stock investments for more than one year:Tax Bracket Capital Gain Tax Rate
Short Term Long Term
10% 10% 0%
15% 15%
25% 25% 15%
28% 28%
33% 33%
35% 35%
39.6% 39.6% 20%
Short term gains on stock investments are taxed at your regular tax rate; long term gains are taxed at 15% for most tax brackets, and zero for the lowest two.So that is off of a tax website and when it says zero it wouldn't apply to me? I thought it mean you would owe nothing, it doesn't specify only to federal and then yes when it comes to state tax.
Expert:  TaxRobin replied 10 months ago.
Those are the federal rates. If you look over your federal return you will see a worksheet that calculated for federal but the states set their own tax laws.

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