Finance Q&A

Would capital gains push up my income tax bracket

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Q. My income is near a tax bracket border, and I am consider selling some assets for a capital gain. If the capital gain counted toward ordinary income, this would push me up a tax bracket. But now capital gains have their own tax rates. Does that mean that they won't affect the tax brackets of my ordinary income?

A. -It will not affect the bracket (regular or AMT) that you reach, but depending on the amount it could affect other things (phase out of personal exemptions, itemized deductions, etc.) that work off of AGI which the capital gain will be a part.

 


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