I was under the impression that the $84,000 disability income was exempt from Federal Income Tax. I was told by a financial advisor/broker that the $150,000 gain on the $200,000 sale of the company stock in my 30-year old 401K is only subject to the 15% capital gains rate. Do you agree?
I will add a bonus if you restate my federal tax liability. Based on the following assumptions:
Married Filing Jointly, Standard deductions, no dependents, no other deductions or credits. Also, aside from being disabled, I turned age 60 last month. Therefore, the $20,000 IRA distribution is not subject to 10% penalty.
--$20,000 withdrawal from Traditional IRA - taxable--$50,000 represents the basis of the company stock from the 401K Plan - taxable-- and $12,000 Rental Income - assuming that is NET rental income (after deductions).
Total adjusted gross income - $82,000, would my estimated tax liability be $20,500?