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Lets say I have absolutely no job/income/dividends/etc except for some long term capital gains, not related to stock options. Lets just say a standard purchase-low then sell-high of some stock. Generally that means the capitial gains are taxed at 0%. But at what dollar level of those long term capital gains would the AMT or NIIT come into play? And is that sliding/progressive?

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Generally that means the capitial gains are taxed at 0%.

No, capital gains are taxed at different rates depending on your total taxable income. See the IRS Topic 409:

A capital gains rate of 0% applies if your taxable income is less than or equal to:

  • $44,625 for single and married filing separately;
  • $89,250 for married filing jointly and qualifying surviving spouse; and
  • $59,750 for head of household.

A capital gains rate of 15% applies if your taxable income is:

  • more than $44,625 but less than or equal to $492,300 for single;
  • more than $44,625 but less than or equal to $276,900 for married filing separately;
  • more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse; and
  • more than $59,750 but less than or equal to $523,050 for head of household.

However, a capital gains rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.

This is a common misconception, people seem to assume that because the first rate step is 0% then capital gains are not included in taxable income. That's not true.

Similarly, AMT and NIIT apply based on regular thresholds.

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  • Great stuff, thanks to the 2 posters in here; a common misconception indeed! Commented May 22 at 20:12
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As the other answer mentions, the 0% long-term capital gains bracket is not unlimited.

If long-term capital gains are your only income, you will never owe any AMT. The more favorable long-term capital gains rates are preserved even under the AMT system. However, if you have other income, long-term capital gains still increase your taxable income, which could indirectly cause you to pay more AMT.

NIIT is more straightforward. If you're filing single, you will start to owe that at a modified adjusted gross income of $200,000.

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  • OK Im slowly getting it here, thanks... For purposes of determining the LTCG bracket, do I simply sum the retirement income with the LTCG, then use that figure to determine the bracket? Or do any of the deductions count here for figuring out which bracket to use for LTCG? Also I have the same type of question with the "income tax" bracket to use and what values to deduct and then tax for IRA income. Both Taxact/Turbotax estimators give me tax due of $8 when I model $105K of LTCG with $12k or IRA income, I cannot reconcile that with the 1040 instructions, those are criminally complex. Commented May 25 at 23:13
  • Gave up google searching and immediately found this on YT: youtube.com/watch?v=xKI2UufBLuI Commented May 26 at 0:26
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    @OpticalCarrier Assuming 2023 married filing jointly: $117k of income minus $27.7k standard deduction = $89.3k taxable income. 0% long-term capital gains bracket goes up to $89,250. So $50 excess x 15% = $7.50 which rounds up to $8.
    – Craig W
    Commented May 26 at 12:17

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