[quote=jeff303][quote=flu]
But it does make me wonder. If someone is at/near the threshold. Let’s say they earned exatly $450k instead of $449k, their entire capital gains is taxed 5% more than if they earned an $1000 less…. If that’s the case, lol……Ouch…[/quote]
So you’re suggesting this higher rate may not be marginal? That would just make no sense at all, but I tried searching and couldn’t find anything to confirm or refute that notion.[/quote]
Both are marginal. Both affect the excess but the wording on the $450K one is pretty convoluted as the
[quote]20 (b) 20-PERCENT CAPITAL GAINS RATE FOR CERTAIN
21 HIGH INCOME INDIVIDUALS.—
22 (1) IN GENERAL.—Paragraph (1) of section
23 1(h) is amended by striking subparagraph (C), by
24 redesignating subparagraphs (D) and (E) as sub-13
MAT12564 S.L.C.
1 paragraphs (E) and (F) and by inserting after sub-
2 paragraph (B) the following new subparagraphs:
3 ‘‘(C) 15 percent of the lesser of—
4 ‘‘(i) so much of the adjusted net cap-
5 ital gain (or, if less, taxable income) as ex-
6 ceeds the amount on which a tax is deter-
7 mined under subparagraph (B), or
8 ‘‘(ii) the excess of—
9 ‘‘(I) the amount of taxable in-
10 come which would (without regard to
11 this paragraph) be taxed at a rate
12 below 39.6 percent, over
13 ‘‘(II) the sum of the amounts on
14 which a tax is determined under sub-
15 paragraphs (A) and (B),
16 ‘‘(D) 20 percent of the adjusted net capital
17 gain (or, if less, taxable income) in excess of the
18 sum of the amounts on which tax is determined
19 under subparagraphs (B) and (C),’’.[/quote]
