Capital Gains Taxes Flashcards
1
Q
How is the applicable capital gains rate determined?
A
The applicable rate is based on taxable income, including ordinary income.
2
Q
T or F - Capital gains are taxed in multiple brackets.
A
False - The capital gains rate applied is determined by your total taxable income. Once a threshold is crossed, ALL of the capital gain is taxed at the applicable rate.
EXAMPLE - If you have a capital gain of $100K, and your total taxable income is above the threshold for the 20% rate, the entire gain of $100K will be taxed at 20%
