Capital gains tax rate - I know there are diff rates (0/15/20) depending on income threshold but is the threshold based solely on “earned income” (i.e., wage)? For ex. if I quit my job and hv zero earned income and sell my stocks with 5M gain in the same yr, there would not be any capital gain tax?? It doesn’t seem right but is that the rule?

likefunny
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No, gains are part of taxable income (even though tax rate is lower) so if you realized $1m of gains most of it would be taxed at 20% even if you had no earned income. You'd also be subject to 3.8% net investment income tax.

likehelpful

That makes sense. Many thanks

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