If I am married filing jointly and we make $250,000 income during 2018 and then sell an asset for $750,000 Long Term Capital Gains, what will be the tax rate on the capital gains?
Trying to understand:
1) Are Long Term Capital Gains taxed at a progressive rate (part of the gain at taxed at 15% and the remaining that exceed total income of $479,000 taxed at 20% or does the entire amount get taxed at 20% if you cross the $479,000 income threshold)?
Also, if that asset is a primary residence that meets section 121 guidelines, is the first $500,000 capital gains exclusion amount disregarded in determining these brackets/tax rates?
It is progressive, and first $500k is ignored. Your understanding is very good.