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I have clients (MFJ) with TY2020 AGI of $59,885. Their tax return shows a refund of $1,036. When I input the long term capital gain of $10,000 from the sale of a home, never their primary residence, their refund shrinks to $886. I am confused, as it is my understanding that LT capital gains are taxed at 0% for MFJ returns with less than $80,000 in AGI. What am I missing?
Best Answer Click here
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Credits?
The more I know the more I don’t know.
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No credits of any type.
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Print the Capital Gain Tax Worksheet for return before the sale input and after
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Thank you. This led me to see that the gain increased total income for purposes other than capital gain tax. Clients are still in the 0% capital gains tax bracket. The increase in total income impacted the bottom line on Schedule A itemized deductions mainly decreasing medical deduction. This increased the amount of taxable income.
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You're welcome
