Question

Is long term capital gains considered part of taxable income?

Forum|Forum|6 years ago
August 30, 2019
1 reply
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I don't have a job this year so my annual income is $0, I am selling my old stocks that have grown with capital gains of $50,000. Capital gains taxes are dependent on annual income, 0%< $39,375.

I am confused what would be considered by taxable income? Will it be $50,000 all of which is coming from capital gains or is it $0 (otherwise), I would see different tax rates in that case. Can anyone throw some light on it?

A

Anonymous_

Employee

@kritarth-anand wrote:
I am confused what would be considered by taxable income? Will it be $50,000 all of which is coming from capital gains or is it $0 (otherwise), I would see different tax rates in that case. Can anyone throw some light on it?

It will start at the $50,000 figure, but bear in mind that, if filing single and taking the standard deduction, your taxable income will drop below that $39,375 threshold (it will be $38,000).

Thus, in the scenario you described (i.e., no other income), you would essentially have no federal income tax liability.