You begin the calculation by reporting all of your capital gains on schedule D the federal form 1040. The actual tax itself is a function of your tax bracket and as an example, if all of your income including capital gains put you in a 10% or 15% federal tax bracket, it's possible that the capital gains taxes is zero. On the high-end, the Obama administration increased the capital gains tax on long-term capital gains to 20% and approximately 3.8% can be added to this for higher earning taxpayers. For those capital gains that are short-term in nature, less than one year holding period, the income is taxed as ordinary income and adds 100% of the gain to your adjusted gross income.. Again the tax is a function of your bracket. Hope this helps and good luck.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.