Suppose I have $9M (million dollars) in net gain resulting from the sale of long-term securities (stock and bond funds).
Can I still assume the maximum federal tax rate is 15%?
Or does the size of the net gain result in a higher tax rate, e.g. 39.6%, due to AMT or other special calculations?
I know: if I had $9M, I could afford to pay a tax professional to answer the question. But this is just a mental exercise. I'm just curious.
The law changed, starting with 2013. Most of your gain would be taxed at 23.8%, the maximum long-term cap gain rate of 20% plus the additional tax on investment income. The higher rates kick in at various income levels, but the vast majority of a $9 million gain would fetch the highest rate.
Phil Marti VITA/TCE Volunteer Clarksburg, MD
To be clear if you're married and make more than 450k then your capital gains over up to 450k will be taxed at 20%. While the long term capital gains are not taxed at the higher rates, they will reduce your itemized deductions and AMT exemption, thus making more your regular income subject to the AMT tax.
Thanks. Great information! I was not aware of those changes.
[I wrote that 3 days ago, but I didn't notice it was never transmitted.]And thanks "remove ps" for the clarification. It gives me useful guidance for further study of my own.
"qguy" wrote in message news:l8rjn8$b4o$ snipped-for-privacy@dont-email.me... [I wrote that 3 days ago, but I didn't notice it was never transmitted.] =========This is a moderated newsgroup, and moderation takes time.
Oh, I know that. But in this case, I found the 3-day-old posting in my Outbox, which suggests it was not transmitted. (Although sometimes OE just gets confused.)
I remember having inexplicable transmission problems that day. I forgot to follow-through after giving it some time to work things out.
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