Is there any 1% minimum tax on taxable-income [similar to AMT for high-income] when you are in low 15% bracket and have substantial long term capital-gains?
e.g. US, single, std-deduction, 2014.
ordinary-income = 16150, capital-gains-LT = 20000. So Taxable-income (TI) is 25000 [std-deduction+personal-exemption =10150]
Since 15% bracket runs till 36900, cap-gain tax is 0% Ordinary income that is taxable is only $5000 and at 10%, tax is $500.
But tax software shows tax as $500 + 1% of TI = $500+$250 = $750 [I suspected bug in software, but want to know if I'm missing some tax code]
That is effectively there is a 1% tax on capital-gains. What am I missing? I thought the tax should be just $500 and no tax on the capital-gains.