Question

In 2020 Fong and Wong are married and file jointly. They have fasable income of $85.000 which includes a long-term capital gain of $10,000 Which of the following is true Select one: O a. Some of the LTCG will be taxed at a rate of 0% and some of the LTCG will be taxed at a rate of 15% O b. All of the LTCG will be taxed at a rate of 15% O c. Some of the LTCG will be taxed at 15% and some of it will be taxed at 20% O d. All of the LTCG will be taxed at a rate of 0% O e. There will be an additional tax of 3.8% on the LTCG due to the Net Investment Income Tax

Answer 1

Answer is B.

All of the LTCG will be taxed at a rate of 15%

Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status.

Following is the applicable tax rate criteria for Married, Filling Jointly.

Long-term capital gains tax rate	Your income
0%	$0 to $80,000
15%	$80,001 to $496,600
20%	$496,601 or more

Total Taxable income of Fong and Wong is $85,000 including LTCG $10,000.

So, as per the above table All LTCG will be taxed at the rate of 15%.