Fermion
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Wife asked a question that I can't answer before 2nd cup of coffee (brain not at 100% yet).
If you had $20,000 in short term capital gains and $10,000 in long term capital gains, and married filing jointly you have about $20,000 in personal exemption plus standard deduction, does that cover the $20,000 in short term capital gains and thus the $10,000 in long term capital gains is taxed at 0%?
In other words, is higher taxed income covered first by the deductions and exemptions?
She was expecting that the long term capital gains plus half the short term would be covered by the $20,000 in deductions/exemptions and you would owe tax on the remaining $10,000 of short term capital gains. On one cup of coffee so far, I was 99.9% sure it was the other way and you would owe no tax, but now I am doubting myself.
If you had $20,000 in short term capital gains and $10,000 in long term capital gains, and married filing jointly you have about $20,000 in personal exemption plus standard deduction, does that cover the $20,000 in short term capital gains and thus the $10,000 in long term capital gains is taxed at 0%?
In other words, is higher taxed income covered first by the deductions and exemptions?
She was expecting that the long term capital gains plus half the short term would be covered by the $20,000 in deductions/exemptions and you would owe tax on the remaining $10,000 of short term capital gains. On one cup of coffee so far, I was 99.9% sure it was the other way and you would owe no tax, but now I am doubting myself.