Thanks so much for following up. I can't tell you exactly, because I don't know exactly how much taxable income
you have...i.e., whether or not you are just barely in the second highest marginal rate or almost in the highest marginal rate. You will have $400,000 worth of long term capital gain which will cause you to be in the highest rate for all or a good portion of the gain. For 2013, the tax laws
of long term capital gains are as follows:
0% applies to long-term gains and dividend income if a person is in the 10% and 15% tax brackets,
15% applies to long-term gains and dividend income if a person is in the 25%, 28%, 33%, or 35% tax brackets, and
20% applies to long-term gains and dividend income if a person is in the 39.6% tax bracket.
In addition, starting in 2013, capital gain income will be subject to an additional 3.8% Medicare
tax for taxpayers with income at or above a certain threshold. This 3.8% Medicare surtax applies to taxpayers with “net investment income” in excess of threshold income amounts of $200,000 for single filers and $250,000 for married couples filing jointly.
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