No long term capital gain taxes???

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zz4
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No long term capital gain taxes???

Post by zz4 » Sun Apr 15, 2018 7:41 pm

This can't be right, can it? You can have no tax liability on a $250K long term gain profit if you earn less than $35k in the year you sell? I am sure I don't understand the brackets, please help.

livesoft
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Re: No long term capital gain taxes???

Post by livesoft » Sun Apr 15, 2018 7:43 pm

That is not right.

The $250K long term gain profit* adds to one's taxable income. Fill out Form 1040 manually to learn how it works.

*Unless as noted below it comes from sale of primary residence after having lived in the home for at least two of the five years immediately preceding the sale.
Last edited by livesoft on Mon Apr 16, 2018 7:56 am, edited 1 time in total.
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FiveK
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Re: No long term capital gain taxes???

Post by FiveK » Mon Apr 16, 2018 1:42 am

zz4 wrote:
Sun Apr 15, 2018 7:41 pm
You can have no tax liability on a $250K long term gain profit if you earn less than $35k in the year you sell?
Just curious: where did you see/hear that?

For 2018, a single filer with $35K wages and $250K LTCG would pay ~$41K federal income tax.

denovo
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Re: No long term capital gain taxes???

Post by denovo » Mon Apr 16, 2018 3:52 am

zz4 wrote:
Sun Apr 15, 2018 7:41 pm
This can't be right, can it? You can have no tax liability on a $250K long term gain profit if you earn less than $35k in the year you sell? I am sure I don't understand the brackets, please help.

The only 250k exemption I know about is selling your primary home, and that's not related to your income.

https://www.nolo.com/legal-encyclopedia ... usion.html

Or are you talking about something else?
"Don't trust everything you read on the Internet"- Abraham Lincoln

rec7
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Re: No long term capital gain taxes???

Post by rec7 » Mon Apr 16, 2018 7:59 am

You total income has to be under around 50k for that to happen.
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invst65
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Re: No long term capital gain taxes???

Post by invst65 » Mon Apr 16, 2018 8:19 am

rec7 wrote:
Mon Apr 16, 2018 7:59 am
You total income has to be under around 50k for that to happen.
I thought it was around $76k in taxable income (and that's not the same as total income) - unless you are talking a single taxpayer.

rec7
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Re: No long term capital gain taxes???

Post by rec7 » Mon Apr 16, 2018 12:54 pm

invst65 wrote:
Mon Apr 16, 2018 8:19 am
rec7 wrote:
Mon Apr 16, 2018 7:59 am
You total income has to be under around 50k for that to happen.
I thought it was around $76k in taxable income (and that's not the same as total income) - unless you are talking a single taxpayer.
I was talking about a single. I guess I should have said AGI. I am doing ballpark numbers off the top of my head.
You could take 50k in capital gain without taxes but your income would have to be 0
Disclaimer: You might lose money doing anything I say. Although that was not my intent. | Favorite song: Sometimes He Whispers Jay Parrack

invst65
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Re: No long term capital gain taxes???

Post by invst65 » Mon Apr 16, 2018 4:29 pm

rec7 wrote:
Mon Apr 16, 2018 12:54 pm
invst65 wrote:
Mon Apr 16, 2018 8:19 am
rec7 wrote:
Mon Apr 16, 2018 7:59 am
You total income has to be under around 50k for that to happen.
I thought it was around $76k in taxable income (and that's not the same as total income) - unless you are talking a single taxpayer.
I was talking about a single. I guess I should have said AGI. I am doing ballpark numbers off the top of my head.
You could take 50k in capital gain without taxes but your income would have to be 0
Actually I believe it's AGI minus deductions, aka "taxable income", currently a little lower down on line 43 of Form 1040. So somebody filing a joint return could have an AGI significantly higher than the $76k threshold and still be eligible for the capital gains exemption. If the standard deduction for joint filers was truly raised to around $20k in the tax reform bill as I've heard, then that would mean you could have a $96k AGI.

Somebody please correct me if I'm wrong.

I took some capital gains earlier this year to buy a new car so I'm hoping my understanding was correct and I won't owe any taxes.
Last edited by invst65 on Tue Apr 17, 2018 2:46 pm, edited 7 times in total.

rec7
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Re: No long term capital gain taxes???

Post by rec7 » Mon Apr 16, 2018 6:10 pm

I am seeing taxes on this if you go above 50k AGI http://www.dinkytown.net/java/Tax10402018.html
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Katietsu
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Re: No long term capital gain taxes???

Post by Katietsu » Mon Apr 16, 2018 8:43 pm

zz4 wrote:
Sun Apr 15, 2018 7:41 pm
This can't be right, can it? You can have no tax liability on a $250K long term gain profit if you earn less than $35k in the year you sell? I am sure I don't understand the brackets, please help.
You are right. It can't be right. You are forgetting that the 35k that you earn is added to the long term gain to determine AGI. So a person with this situation would have 285k AGI. Just because long term gains have special tax rates, does not mean that they do not contribute to taxable income.

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