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For paying long-term capital gains tax, is Required Minimum Distribution counted as income?
I got the following table from the Internet. Case in study: John is single and chooses to not get RMD in 2020 so his 2020 income will be under $40,000. Does it mean that he can sell any large amount of long-term stocks and make big capital gains without paying tax? That seems to look like a one-in-a-lifetime opportunity for him as only this year 2020 he can choose to not get RMD. A separate case: John chooses to get RMD and assume RMD is counted into income so his income is now $50,000. What taxes will he pay for making $120,000 capital gains?
Long-term capital gains tax rates for the 2020 tax year
FILING STATUS 0% RATE 15% RATE 20% RATE
| Single | Up to $40,000 | $40,001 – $441,450 | Over $441,450 |
| Married filing jointly | Up to $80,000 | $80,001 – $496,600 | Over $496,600 |
| Married filing separately | Up to $40,000 | $40,001 – $248,300 | Over $248,300 |
| Head of household | Up to $53,600 | $53,601 – $469,050 | Over $469,050 |
Source: IRS
