Retireby45ish
Recycles dryer sheets
- Joined
- Dec 8, 2018
- Messages
- 209
I stumbled upon the 0% capital gains rate and was thinking that when the time was right for retirement I could simply sell off investments while staying in that 0% and pay little to no taxes. I have most of my investments in taxable accounts.
I came across this calculator that seems to paint the following picture.
Tax Calculator - Estimate Your Income Tax for 2019 - Free!
I figure I need about 90k to live on yearly (myself and wife filing jointly). Probably less but this is our current spend.
Dividends and other income from passive investments = 25k
Long term capital gains = remainder to get to 90k -> 65k
Q1:
It seems like if we stay under the ~80k (2020) threshold of income that all long term gains less than 80k would put me in a tax bracket of 0%.
But then I read another article that states that the gain itself should be counted as income. So that 65k would be added to the 25k as income source. ?? Clearly that changes things since income is now 90k.
Q2:
Also, l have spoken only I terms of the gains. That means you could unlock even more than the 65k needed, since you would have some cost basis to that capital when you sold it. (Ie. sell 65k worth of cash but paid 25k, so only a gain of 40k). Am I correct here?
So now I’m confused. Can someone help clarify this for me.
Thanks!
I came across this calculator that seems to paint the following picture.
Tax Calculator - Estimate Your Income Tax for 2019 - Free!
I figure I need about 90k to live on yearly (myself and wife filing jointly). Probably less but this is our current spend.
Dividends and other income from passive investments = 25k
Long term capital gains = remainder to get to 90k -> 65k
Q1:
It seems like if we stay under the ~80k (2020) threshold of income that all long term gains less than 80k would put me in a tax bracket of 0%.
But then I read another article that states that the gain itself should be counted as income. So that 65k would be added to the 25k as income source. ?? Clearly that changes things since income is now 90k.
Q2:
Also, l have spoken only I terms of the gains. That means you could unlock even more than the 65k needed, since you would have some cost basis to that capital when you sold it. (Ie. sell 65k worth of cash but paid 25k, so only a gain of 40k). Am I correct here?
So now I’m confused. Can someone help clarify this for me.
Thanks!