1. Home
  2. Taxes General Forum
  3. dividend / long-term capital gain question

dividend / long-term capital gain question

I am getting a bit confused on this, and will appreciate your comments.

I understand that the long-term capital gain is currently taxed at

15%. The question is this a cap rate or fixed rate. For example, assuming one person total income is $10K and all are long-term capital gain. What rate will this person be taxed at?

A related question is whether the tax residency status of person-in- question matter? i.e. will the rate same for resident and non-resident (after taking consideration of applicable deduction perspectively).

Thanks.

Reply to
My interest
Loading thread data ...

The long term capital gain rate is 5% or 15% for 2007, so the above would be taxed at 5%. See for example

formatting link
still get the standard deduction and exemption, but this income isnot qualified for the stimulus check. In 2008, the lower 5% ratre drops to 0%.

Generally 1040-NR filers would be taxed at a flat 30% on their personal capital gains, no tax break here. However, I would need to check if income from long term capital gains even need to be reported (supposedly only if they are from US corporations do they need to be reported, but what about US corporations cross listed on foreign exchanges), and besides do foreign holders of US stock and mutual funds that pay dividends and capital gains even bother filing 1040- NR? I know US holders of foreign stocks that pay dividends don't file in the foreign country. Also, there are many tax rates on page 4 of the 1040-NR. So basically, I have no idea the answer to your question.

Reply to
removeps-groups

If a single person's total adjusted gross income is $10,000 of long-term capital gain, then the first $8,750 isn't taxed at all (offset by standard deduction and personal exemption), and the rest will be taxed at 5%.

In general, you figure out what your taxable income is *not* counting long-term gains. If that adjusted taxable income is below the end of the 15% bracket, then long-term gains falling in to whatever "room" is left in the bracket is taxed at 5% (0% in 2008), with any other long-term gains being taxed at 15%.

Note -- those are only nominal rates. Depending on your total tax situation, various phaseouts can boost the actual marginal rate on gains above 15%.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

Reply to
Rich Carreiro

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.