Capital Gains Tax Rates after Retirement Questions

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Don46
Posts: 198
Joined: Sun Feb 24, 2013 5:53 pm

Capital Gains Tax Rates after Retirement Questions

Post by Don46 »

My wife and I are planning to retire in two years. We have about $4 million in assets, some in real estate and stocks with a good deal of long term capital gains. Our income now is about $300k. After retirement I will get 30k social security. My will gets 25k in a pension. I have another 50k in commercial real estate income. So we will go from 300k to about 105k in benefits and income.
Help me understand Long Term capital gains tax rates. When the LTCG rate is 15 percent on income 72,501 to 450,000, and 20% above 450k, does that refer to my ordinary income, pension, and (some of) social security? Or to the whole amount of income, including capital gains? Is there, I want to know, an obvious tax advantage for me in waiting to harvest capital gains until after our income drops?
john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

Re: Capital Gains Tax Rates after Retirement Questions

Post by john94549 »

Yes. Consult your tax advisor.

I was answering your specific question.
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House Blend
Posts: 4877
Joined: Fri May 04, 2007 1:02 pm

Re: Capital Gains Tax Rates after Retirement Questions

Post by House Blend »

These wiki pages may help you get oriented on the new 20% LTCG rate, and the new 3.8% "bonus" tax.
http://www.bogleheads.org/wiki/Capital_ ... stribution
http://www.bogleheads.org/wiki/ACA_net_ ... income_tax

The 20% rate kicks in exactly when you hit the top 39.6% income bracket. Seems unlikely you would be hit with that rate, but the 3.8% bonus might affect you.
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