Long-term capital gains rate

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Long-term capital gains rate

Postby expat » Thu Jan 03, 2013 1:14 pm

Under the new federal tax laws, if I am single with zero annual income and realize a $1M long-term capital gain, what is the capital gains rate?

Is it zero percent because there is no income??
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Re: Long-term capital gains rate

Postby livesoft » Thu Jan 03, 2013 1:16 pm

If you realize a $1M LT cap-gain, you will by definition have at least $1M of income.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Long-term capital gains rate

Postby KyleAAA » Thu Jan 03, 2013 1:23 pm

You would pay the max marginal rate in that case. You'd have to do the math to find out your exact effective tax rate.
Last edited by KyleAAA on Thu Jan 03, 2013 1:52 pm, edited 1 time in total.
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Re: Long-term capital gains rate

Postby TN_INVEST » Thu Jan 03, 2013 1:34 pm

Gross income includes "all income from whatever source," and is not limited to cash received. It specifically includes wages, salary, bonuses, interest, dividends, rents, royalties, income from operating a business, alimony, pensions and annuities, share of income from partnerships and S corporations, and income tax refunds. Gross income includes net gains for disposal of assets, including capital gains and capital losses. Losses on personal assets are not deducted in computing gross income or adjusted gross income.
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Re: Long-term capital gains rate

Postby Leesbro63 » Thu Jan 03, 2013 1:43 pm

My understanding would be 15% on the first $250,000 or $37,500. 18.8% on the amount between $250,000 and $400,000 ($450,000 if married) or $28,200. And 23.8% on the excess which is $142,800. For a total tax due of $208,500 or about 21% effective total tax rate.
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Re: Long-term capital gains rate

Postby tfb » Thu Jan 03, 2013 1:47 pm

expat wrote:Under the new federal tax laws, if I am single with zero annual income and realize a $1M long-term capital gain, what is the capital gains rate?

See today's post Fiscal Cliff Deal and Dividends and Capital Gains. It will be a blended rate.
Harry Sit, taking a break from the forums.
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Re: Long-term capital gains rate

Postby Sidney » Thu Jan 03, 2013 6:52 pm

If you have $1.0 million in loss carry-forwards from prudent TLH trading in 2008 and 09, you would owe nothing.
I always wanted to be a procrastinator.
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