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Capital Gain Tax and New Tax Law
01-12-2018, 11:44 PM
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#1
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Dryer sheet wannabe
Join Date: Jan 2014
Posts: 21
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Capital Gain Tax and New Tax Law
I have a question regarding how capital gain tax works under
new tax law.
Under new law:
Capital gains are not taxed if your family earned income is below $77k.
And AMT will not kick in if your capital gain is below 1million.
So say John Doe, married, retired, with no earned income. But sold investments(stocks, mutual fund, investment property) with long term capital gain 600K in 2018.
His tax due for 2018 will be 0.
If the same scenario but in 2017, he would have to pay a lot of tax because AMT would have kicked in even though he had no earned income.
Anything wrong with this picture?
Thx in advance,
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01-13-2018, 12:39 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,183
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The capital gains taxes are not changed by the new tax law. In your example of married couple with long term capital gain of 600K ... he would pay 0% on first 77K, 15% from 77K to 479K and 20% from 479K to 600K. Also, they would pay the 3.8% investment income surcharge on everything over 250K.
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01-13-2018, 03:54 AM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Another thing wrong with the OP is the statement about earned income below $77K.
Wrong:
 Quote:
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Capital gains are not taxed if your family earned income is below $77k.
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Capital gains are not taxed if your MFJ taxable income is below $77.2k (check the exact number).
Taxable income is not earned income. It is derived from Adjusted Gross Income after subtracting Deductions which can be substantial. See Form 1040.
This may also be helpful: https://www.fool.com/taxes/2017/12/2...s-in-2018.aspx
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01-13-2018, 05:13 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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AMT kicks in at ~$109,000 for MFJ but it depends on various factors whether you’ll owe any extra due to it. $1M is where the AMT exemption phases out.
__________________
Retired since summer 1999.
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01-13-2018, 05:35 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,371
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Quote:
Originally Posted by sewang
.... Anything wrong with this picture?
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Yes. Your numbers, your analysis and your attitude.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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01-13-2018, 06:26 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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01-13-2018, 06:41 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,622
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Quote:
Originally Posted by pb4uski
Yes. Your numbers, your analysis and your attitude.
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I must have missed the "attitude" as it appeared to be a straight forward question.
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Retired May 13th(Friday) 2016 at age 61.
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01-13-2018, 06:45 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,371
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Wake up! 😁
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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01-13-2018, 06:57 AM
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#9
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Dryer sheet wannabe
Join Date: Jan 2014
Posts: 21
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Quote:
Originally Posted by kramer
The capital gains taxes are not changed by the new tax law. In your example of married couple with long term capital gain of 600K ... he would pay 0% on first 77K, 15% from 77K to 479K and 20% from 479K to 600K. Also, they would pay the 3.8% investment income surcharge on everything over 250K.
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Thanks a lot. This makes a lot of sense
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01-13-2018, 06:59 AM
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#10
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
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Quote:
Originally Posted by pb4uski
Yes. Your numbers, your analysis and your attitude.
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Looks like you put a little too much grouch powder on your cereal this morning. A bit more sugar wouldn’t hurt .. 
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01-13-2018, 08:19 PM
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#11
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Recycles dryer sheets
Join Date: Feb 2014
Location: SF Bay Area
Posts: 289
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Quote:
Originally Posted by pb4uski
your attitude.
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?? !!
Where was an attitude displayed? Chill.
OP...as one of the less learned members of this board, I gain far more from general questions like yours than I do from the more ******* types.
__________________
"The only function of economic forecasting is to make astrology look respectable"
- J.K. Galbraith
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