Do realized capital gains count towards taxable income

Submitted by Philip Detlefs on Mon, 2020-11-09 14:46

Do realized capital gains count towards your taxable income? I’ve got a client with $250K of unrealized gains. She is a student and her income for 2020 is $0. I want to sell the positions and realize the gains. Since her income is $0, does this mean she won’t owe anything on the realized gains? Or, does this mean the $275K will count as income and she will owe 15%?



Submitted by Alan - IRA critic on Tue, 2020-11-10 00:33

The cap gains will be taxable (15% LT) and full ordinary rate (ST), although a small portion will be offset by her standard deduction. Other possible variables might be education credits or kiddie taxes.

Submitted by David Mertz on Tue, 2020-11-10 01:24

Depending on the amount taxable at ordinary income tax rates, some of long-term capital gains could be taxed at 0%.

Add new comment

Log in or register to post comments