itonewbie
Level 15
04-07-2023
07:09 PM
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Sounds right. Your answer is in §1(h)(B).
The threshold for 25% for MFJ back in 2016 was $75,300 and that is indexed to $83,350 this year. That's why your client's qualified dividends are taxed at 0%.
(h) Maximum capital gains rate
(1) In generalIf a taxpayer has a net capital gain for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of—
(A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of—
(B) 0 percent of so much of the adjusted net capital gain (or, if less, taxable income) as does not exceed the excess (if any) of—
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