What counts as income?

[tungsten]

I feel like this is a silly question, but I just need a little clarification. 

The idea of retiring early and selling stocks at a low enough level to avoid capital gains taxes is very appealing to me.  If I am living entirely off of stock that is being sold, then is it just the gains themselves that are being counted as income? I've already paid taxes on the principle when I earned the money at my job, so I don't see why all the money it would be taxed as income again.

It looks like for 2018 if a single person has income between $0 and $38,600 they will pay no long term cap gains taxes.
So does this mean that I can only live on $38,600/yr total if I want to avoid the tax or does it mean that I could live on, say, $50,000/yr and as long as the cap gains from the stock sold are under $38,600 still avoid cap gains tax?

Thanks guys!

[TheHardenedInvestor]

Only the *gains* are taxed. If you sold $50,000 worth of stock, but only had $1,000 of capital gains, then only $1,000 is subject to taxes, which may in fact be no taxes at all.

[MDM]

And note the $38.6K is taxable income, not gross.  If LTCGs are your only income you could have $28.6K + $12K (std. deduction) = $50.6K in gains and pay $0 federal tax.

[AMandM]

Also, your income is not necessarily all from selling stock. Some of it might be dividends, interest from bonds, etc.