Ron Hardin <rhhardin[at]mindspring.com> writes:

- quote -

You are. When there are net long-term capital gains
and/or qualified dividends, you use the "Qualified
Dividend and Long Term Capital Gain Worksheet"
to compute your tax instead of the tax tables. This
worksheet implements the 15% rule. Poke around in
TT and see if it shows this computation anywhere.
Presumably it does.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Ron Hardin <rhhardin[at]mindspring.com> wrote:

- quote -

A long lost voice from the past!

OK - Ohio does not have any special tax treatment for
capital gains, so Ohio taxes capital gains just like any
other ordinary income.

What you are missing is the computation of your income tax.

The capital gains that shows up on Form 1040 Line 13 gets
added to all other income, and eventually is part of the
Line 43 Taxable Income. The tax gets calculated on Form 1040
Line 44.

The question you are actually asking is how to calculate
your income tax.

Look at the Form 1040 instructions,
http://www.irs.gov/pub/irs-pdf/i1040gi.pdf
and on page 38 you need to fill out the qualified dividends
and capital gains worksheet.

Line 15 of that worksheet is where your capital gains get
taxed at only 15%.

That worksheet allocates your taxable income between 5%
capital gains rate, 15% cap gains rate, and other income.

--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Ron Hardin <rhhar...[at]mindspring.com> wrote:

- quote -

The step you are missing is calculating your tax on line 44.
You need to use the worksheet to calculate your tax because
of your capital gains distribution. See pages 36-38 of the
instructions for Form 1040:

http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

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Ron Hardin <rhhar...[at]mindspring.com> wrote:

- quote -

Try using the HELP key more often. Many such programs have
line-by- line and topical help capabilities.

- quote -

Or, it obtains the information from your 1099-DIV from that fund.

- quote -

You are.

- quote -

Yes

- quote -

Yes, see the line instructions for line 44. Actually you
need the instructions on page 36 of the 1040 book to
calculate the correct amount of tax. In other words, you
DON'T use the Tax Tables to figure the tax liability (and
neither does TT).

- quote -

It doesn't have to be that way. ALL forms and instructions
can be downloaded (and printed) from the IRS website
(www.irs.gov)

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- quote -

That's correct if you had no actual stock sales that year
and no loss carryover.

- quote -

Just wait ...

- quote -

Yep.

- quote -

Yep. Go to line 43 (that's your taxable income). Look up
the tax on that amount by using the tax tables. Compare to
line 44. If line 44 is not equal to the amount in the tax
tables, then not all of your income was taxed as ordinary
income.

- quote -

Sounds like you have some downloading to do! Look for the
capital gains worksheet on page 38 of the 1040 instructions.

--
Don EA in Upstate NY

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- quote -

You are missing something. All your income, of all types, is
added together on the first page of Form 1040. This has
nothing to do with the tax rate that is applied.

- quote -

Yes. The tax is calculated on a worksheet that applies the
appropriate rates to different types of income. Look at the
Tax Smart Worksheet in between lines 43 and 44 of Form 1040.
One box will be checked to indicate what method was used to
calculate your tax. You will probably find that it is the
Qualified Dividends and Capital Gain Tax Worksheet. If you
look at that worksheet you will see different rates being
applied to ordinary income and capital gains.

Bob Sandler

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"Ron Hardin" <rhhardin[at]mindspring.com> wrote:

- quote -

The capital gains distributions are taxed at 15%. The
calculation is completed on a separate worksheet which feeds
to line 44 and is not included with the filed return.

I can't speak for OH, but most states tax capital gains at
the same rates as all other income.

Ira Smilovitz

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I'm trying to figure out what Turbo-tax did with a capital
gain distribution from a mutual fund, to understand it.

It gets copied onto line 13 (Capital gain or loss) with
- quote -


That puts it in the stream for taxation as ordinary income,
unless I'm missing something.

On the other hand, isn't it supposed to be taxed at 15% max?

Is there some following step that handles it?

I get no IRS forms or instructions thanks to e-filing the
previous year, so it's all reverse engineering.

The ultimate goal is to find out how Ohio taxes capital
gains, but I ran into this confusion first.

--
Ron Hardin
rhhardin[at]mindspring.com
On the internet, nobody knows you're a jerk.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >