Author Topic: Question about long term capital gains.  (Read 859 times)

MrGville

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Question about long term capital gains.
« on: March 01, 2017, 12:54:30 PM »
I have a taxable investment account that I would like to withdraw money from to use as a down payment on a house.  By April, all of the money that I am planning on using for the down payment will have been invested for at least 1 year (so now considered 'long term' for capital gains purposes).  I am trying to estimate how selling these investments will affect my taxes. 

I know that if my spouse and I are in the 15% tax bracket, then we do not have to pay taxes on long term capital gains.  Our total salaries bring us into the 25% bracket, but after factoring in 403b, Trad. IRA, and HSA contributions, we are easily into the 15% bracket.  So our taxable income that will be listed on line 43 of our tax return will be less than the upper limit of the 15% bracket.  Does this mean that we will pay no taxes on the capital gains, or will we still pay taxes because of the level of our salaries.  Thanks

zolotiyeruki

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Re: Question about long term capital gains.
« Reply #1 on: March 01, 2017, 01:07:48 PM »
In the Form 1040 instructions, there's a handy-dandy "Capital Gains Tax Worksheet" that will very precisely answer your question :)

MrGville

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Re: Question about long term capital gains.
« Reply #2 on: March 01, 2017, 01:40:31 PM »
The answer is I will pay zero federal taxes on my long term capital gains.  Thanks for pointing me to that worksheet.