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I have a client with less than $44,000 taxable income so they should be eligible for the 0% long term capital gains rate. How do I make sure this is applied in Pro connect? I have never had this for another client. How is this supposed to be shown on the return? The taxpayer has approximately $15,000 in long term capital gains. The 15,000 is right now coming up line 7 of the Form 1040. No Schedule D. Should I press non-taxable for federal? But then the long-term capital gains show up nowhere on the return. I could force the Schedule D. I do not think the LT capital gains should show up on line 7 because then it would limit the benefit of the standard deduction. Any help?
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They are still taxable income, even if the tax rate is zero.
Leave the Sch D as is. The software will do the calculations, and you can check them.
EDIT: If the only capital gains are capital gain distributions, then Sch D is not required.
The more I know the more I don’t know.
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Most software has a schedule showing the tax computation.
If your software doesn't, get out a pencil & work thru the Sch D math manually.
The LTCG are not "non-taxable" so marking them as such would be wrong.
The LTCG ARE taxed, they are just taxed at zero.
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Sch D worksheet, capital gain worksheet.
