Long term Capital gain tax treatment

[Savoir Faire-Demogague in NJ]

Hi all....

I have a question about tax treatment of long term capital gains, upon reviewing my tax return, I notice that the $11,000 of long term capital gains is being taxed at ordinary rates. For me, my marginal rate is 25%.

The LTCG on my 1099 are in Box E. I see that on Form D, that tax guy put this amount on the correct line(Box E), and totaled up the amounts, and carried the number($11,000) to the line on form 1040. There was no adjustment of any kind. Thus the amount gets no favorable cap gain tax treatment.

Any ideas?
Thanks.

[taxref]

You are probably receiving LTCG rates on your $11K gain, but its hidden on the 1040.  Tax for those with LTCGs and QDs, are computed on a separate workpaper.

There is no breakout on Page 2 of the 1040 showing the favorable tax treatment of LTCGs and Qualified Dividends.  One only sees all the income going into AGI.  Then, after exemptions and standard/itemized deduction, it all shows up in taxable income and a tax number follows.

If you actually apply the ordinary income rates (via the rate schedules) to that taxable income, though, you will most likely find it doesn't match.  The rate charts come up with a higher total tax than shown on the return.  

[mwcpa]

maybe ask your tax guy, after 4-15, for the worksheet to compute the tax... my software prepares such, I review it and I keep a copy in my files....

[taz157]

Apr 14, 2014 5:27:58 GMT -5 mwcpa said:

maybe ask your tax guy, after 4-15, for the worksheet to compute the tax... my software prepares such, I review it and I keep a copy in my files....

Yeah that! We do the same. It could also be part of the client's copy of the return too.

[Savoir Faire-Demogague in NJ]

Thanks for the responses.

[andreawick]

Apr 14, 2014 5:27:58 GMT -5 mwcpa said:

maybe ask your tax guy, after 4-15, for the worksheet to compute the tax... my software prepares such, I review it and I keep a copy in my files....

always ask after 4-15.....

[rangerj]

What do clients do with the copies of the tax returns we give them. I give my clients a paper copy and a CD with the last five years of returns on it. Invariably I get a call at some point in the future from a client who wants a copy of one or more tax returns for one reason or another.  

[Ombud]

Anyone else charge for the 3rd copy? I mean if they cannot keep track of their original, 1st copy, or 2nd copy ~~~ why a free 3rd?

It's usually just a few clients and they have the option of the pdf version, but there's staff time & mailing (miniscule cost) involved

[TheOtherMe]

Every place I have worked has charged for copies that don't go out with the original.  Yes, there are costs.