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IANATA, but if you look at the qualified dividends and capital gains tax worksheet [0] on personal income tax form 1040 (that’s the main tax form for individual
by zamfi 9y ago
IANATA, but if you look at the qualified dividends and capital gains tax worksheet [0] on personal income tax form 1040 (that’s the main tax form for individuals), you’ll find that your capital gains tax rate is dependent on your income including capital gains.
For the purposes of your example, Larry and Sergei would pay no tax on the first 37,949 of capital gain income (thanks to the $1 salary), but regular capital gain rates on the next ~billion.
[0]: https://apps.irs.gov/app/vita/content/globalmedia/capital_gain_tax_worksheet_1040i.pdf https://apps.irs.gov/app/vita/content/globalmedia/capital_ga...
- e12e 9y agoSo does that mean that the effective tax-rate on 100k in (only) capital gains is roughly 63% of the nominal capital gains rate? And how would that typically compare to taøotal taxes on, say, 50k income tax and 50k (taxed) capital gains?
- njarboe 9y agoThanks. That makes sense. Didn't think a loophole that big would not be talked about more. On the other hand, it is interesting to know that you can have a capital gains income of ~75k as a married couple and pay no taxes, if you have no other income. Not a bad income for early retirement.
- tanderson92 9y agoHere's an even more ambitious use of loopholes: "How to pay ZERO taxes in retirement with 6-figure expenses" The poster "livesoft" is one of the consistently insightful and funny posters I know. https://www.bogleheads.org/forum/viewtopic.php?t=87471 https://www.bogleheads.org/forum/viewtopic.php?t=87471