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Short-Term Capital Gains - taxed as same rate of ordinary income or included as ordinary income

mitrichon
Level 1

Are short term gains counted as (a) "as ordinary income" or are they (b) "taxed at the same rate as ordinary income?"  This is a big difference.  A person with income of $35,000 may be in the 12% tax bracket but with the option of selling stock for a $45,000 Short-Term gain needs to consider the tax consequences of: (a) having that much more ordinary income and have their overage of $40,125 (for single) taxed at 22% or (b) getting taxed at 12% (same rate of ordinary income which excludes the short-term capital gain.)  

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2 Comments 2
George4Tacks
Level 15

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

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j-kanabis
Level 3

taxed at ordinary rates  so portion of your income (w/ short term gain) will be taxed at 10%; portion at 12% and portion @ 22%