Traditional IRA Tax Question
Just to make it clear to me (a non-CPA), I want to ask a hypothetical question: In 2019, A retired 65 year old takes a traditional IRA distribution (his only taxable income) that, after taking the standard deduction, sets his taxable income at $78,950 (the top end of the 12% bracket), he will owe tax of $1,940 (lets also say he lives in Florida, so no state tax). If that same person also had a $10,000 LT capital gain, is the capital gain taxed at 15%, or does the capital gain get taxed at 0%, but his $10k of his income gets pushed up into the 22% bracket?
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2020-01-16 18:31
Cap gains are stacked on top of other income, so the cap gains will be taxed at 15% and ordinary income will stay in the 12% bracket.
Permalink Submitted by Peter Thomann on Thu, 2020-01-16 23:30
Actually, the federal 2019 tax on $78,950 for a MFJ taxpayer is $9,086.
Permalink Submitted by John Boyle on Fri, 2020-01-17 03:26
Yes. My mistake.