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Lev
Lev, Tax Advisor
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This year I sold some stock that Ive held for longer than

Resolved Question:

This year I sold some stock that I've held for longer than one year. My net profits on the transaction was roughly $180,000. However, I am self-employed and my income was marginal, as I was able to live solely off a portion of my capital gains from the stock sale.

I have tried the various capital gains tax calculators online, but all seem to provide a different amount of how much I should expect to owe. Can you help me?

Thanks,

Jeff
Submitted: 3 years ago.
Category: Tax
Expert:  Lev replied 3 years ago.

LEV :

As you held the property more than a year - the gain will be treated as long term capital gain - which is taxed at the tax rate not more than 15% - thus your tax liability on $180,000 net capital gain will be up to $180,000*15% = 27,000 (plus CA state income tax)

LEV :

In additional - part of your capital gain that will be otherwise taxed at 15% - will not be taxable

LEV :

To determine that part - we need to know your filing status, dependents, other deductiosn you normally claim

Customer :

Hi Lev,Why wouldn't I be taxed in the 10% bracket, if my "taxable income" is

Customer :

less than $8000?

LEV :

Your net profit from teh sale of stocks as you originally pointed was $180,000 - that is your taxable income - and it is way more than $8000

Customer :

oh, so capital gains taxes are taxed as "taxable income" after the first $8000?

Customer :

at 15%?

LEV :

 


If - for instance - you are single, no dependents, or other deductions - and $180,000 of your long term capital gain – is your only income - $8000 will be your personal exemption and standard deduction.


Then – income $34,000 that will otherwise taxes at 10% or 15% - will not be taxed (because that is long term capital gain)


Other income $180,000 - $8000 - $34,000 = $138,000 will be taxed at 15%

LEV :

So in this eample - your federal tax liability would be $20,700

Customer :

great! thanks so much for your help!

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 23251
Experience: Taxes, Immigration, Labor Relations
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