Capital Gains and Losses

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In 2016, my AGI was $85k, almost entirely from the salary…

In 2016, my AGI was...
In 2016, my AGI was $85k, almost entirely from the salary from my job. My taxable income was $25k.
—In 2017, I expect my employment income to remain the same, however, I will receive $2,000,000 as my interest in a Limited Partnership that is selling a family ranch.
—Will I pay 15% on the $2,000,000 due to my ordinary income or will I pay 23%, including the Medicare tax? or something else?
Thanks,
Kirk
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11/18/2017
emc011075
emc011075, Master Tax Adviser
Category: Capital Gains and Losses
Satisfied Customers: 3,873
Experience: Master Tax Adviser and Enrolled Agent
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Hi. My name is ***** ***** I will be happy to help you.

Assuming the entire 2M are capital gains, for capital gains purposes you will be in the highest tax bracket. Which means the 2M will be taxed at 20% + 3.8% Net investment income. The Medicare tax only applies to earned income (wages, salaries, SE income).

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Customer reply replied 8 months ago
Thanks, Eva!

You're welcome. Is there anything else I can help you with today?

emc011075
emc011075, Master Tax Adviser
Category: Capital Gains and Losses
Satisfied Customers: 3,873
Experience: Master Tax Adviser and Enrolled Agent
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emc011075 and 87 other Capital Gains and Losses Specialists are ready to help you
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Customer reply replied 8 months ago
No, thanks!
Customer reply replied 8 months ago
Actually, Eva, can I ask a follow up question?

Sure.

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