Hi,
This year my MIL will be in the 15% tax bracket in 2008 (single, 15% tax bracket for 2008: $8,026 < taxable income < $32,550). Her taxable income for 2008 will be around $26,000. She will be receiving a large, long term capital gain of around $100K in November. It is my understanding that some of those gains would qualify for the 0% capital gain tax for 2008. I have read about it and it is as clear as mud to me.
My understanding is that:
she will be paying 0% on $32,550 - $26,000=$6,550 of capital gains and 15% on the rest, i.e. $100,000 - $6,550 = $93,450.
Is that correct?
This year my MIL will be in the 15% tax bracket in 2008 (single, 15% tax bracket for 2008: $8,026 < taxable income < $32,550). Her taxable income for 2008 will be around $26,000. She will be receiving a large, long term capital gain of around $100K in November. It is my understanding that some of those gains would qualify for the 0% capital gain tax for 2008. I have read about it and it is as clear as mud to me.
My understanding is that:
she will be paying 0% on $32,550 - $26,000=$6,550 of capital gains and 15% on the rest, i.e. $100,000 - $6,550 = $93,450.
Is that correct?