Captial Gains for 2008
I have a client that has some non-qualified mutual funds that have some positive gain. He is in the 15% tax bracket. I believe that for 2008, 2009 and 2010 that if he stays in the 15% bracket the gains would not be taxed. Am I correct?
Permalink Submitted by Alan Spross on Fri, 2008-09-05 20:57
Mostly correct. The LT gains, but not ST gains will receive a -0-% tax bracket if they fall in the 15% or lower bracket. But those gains are still included in AGI, so the real impact may be higher than -0- if itemized deductions are reduced or other tax credits affected by reason of the higher AGI from the gains.
The same applies for qualified dividends as for LT gains. However, since both qualified dividends are LT gains are both only taxed @5% in the 15% bracket now, this savings only amounts to 5%. And state income taxes are still due, with most states taxing these gains at the full ordinary income rate.