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We are married filing jointly and our yearly income from…

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We are married filing jointly...
We are married filing jointly and our yearly income from pensions, social security , etc is around $50,000. We hd a long term capital gain in 2015 of about $160,00. Is that amount added to our income to push us into a much higher tax bracket? Looking at capital gains tax tables it shows that if income was below apx $75,900 we would not have to pay capital gains.
Submitted: 2 years ago.Category: Tax
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2/12/2016
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Q1: Is that amount added to our income to push us into a much higher tax bracket?

A1: Yes, capital gains is added to ordinary income and can cause a tax bracket jump. However capital gain income is taxed at a different rate. That rate depends on whether the asset was short or long term. If long term, the capital gains rate would be 15%. If short term gain, those gains will be taxed at the ordinary income rate.

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Q2: Looking at capital gains tax tables it shows that if income was below apx $75,900 we would not have to pay capital gains.

A2: The floor amount for TY 2015 is $74,900, but this amount refers to total income, not just ordinary income.

Let me know if I can be of further assistance to you regarding this matter.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago

In my previous response, I meant to write ceiling amount of $74,900, not floor amount. Only those whose total income falls under the 10 and 15% tax bracket is eligible to take advantage of the 0% capital gains.

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