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!