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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3152
Experience:  EA, CEBS - 35 years experience providing financial advice
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If my ordinary income is $31,000 in 2008 and have long term

Customer Question

If my ordinary income is $31,000 in 2008 and have long term capital gains of $43,000 is the ordinary income taxed at 15% and the cap. gain at 0%
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thank you for using Just Answer. Do you file as married filing jointly or single?
Customer: replied 8 years ago.
single - spouse passed away in January of 2007
Expert:  Marvin,EA replied 8 years ago.
Do you have any dependents?
Customer: replied 8 years ago.
no, just me
Expert:  Marvin,EA replied 8 years ago.
If congress does not change the tax laws for capital gain rates for 2008, the 5% maximum capital gain tax (for taxpayers in the 10% or 15% tax brackets) will drop to 0%. If you income will be $31,000 your long-term capital gain rate will be 0%.
Expert:  Bill replied 8 years ago.
Customer

 

If you have ordinary income of $31,000 and long term capital gains of $43,000 then your gross income is $74,000 and your taxable income after the standard deduction (if under age 65) and your personal exemption will be $65,050 which exceeds the 15% tax bracket cut-off of $32,550 so only a portion of the capital gains will be taxed at 0% ($10,500) with the balance taxed at 15%.

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3152
Experience: EA, CEBS - 35 years experience providing financial advice
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