Why is 1250 unrecaptured taxed at 25% on all amounts above 15% instead of 22% and 24%? Prior brackets jumped from 15% to 25% so it made sense?

Forum|Forum|6 years ago
December 7, 2019
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Best answer by TaxGuyBill

It works correctly for me.

I added $1000 of Unrecaptured Section 1250 Gain to a tax return in the 22% tax bracket, and it added $220 of income tax.

You may want to look at the entire tax return to see if anything else changed besides regular income tax. For example, the 'extra' income could reduce some credits or deductions or be subject to the Net Investment Income Tax or possibly even AMT.

T

TaxGuyBillAnswer

Level 15

It works correctly for me.

I added $1000 of Unrecaptured Section 1250 Gain to a tax return in the 22% tax bracket, and it added $220 of income tax.

You may want to look at the entire tax return to see if anything else changed besides regular income tax. For example, the 'extra' income could reduce some credits or deductions or be subject to the Net Investment Income Tax or possibly even AMT.

M

mashmanAuthor

Level 3

Did it calculate tax on the Sch D Tax worksheet or the Schedule D Tax Worksheet. The Sch D Tax worksheet just has a flat rate of 25% on the unrecaptured. My client is better off calling it ordinary income.

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