A very simple tax question on how you get the 15% rate for long term capital gains

[Ralph]

If both short and long term capital gains are added together and reported on 1040 line 7, then added to income, how is the 15% ever applied? I have not sold any stock in a taxable account before so I am a babe in the woods on this one. I must be missing something.

[disneysteve]

Short and long term capital gains are itemized on Schedule D.

[Ralph]

Short and long term capital gains are itemized on Schedule D.

I did that (I have only long term), but at the end you add them together and enter them on the 1040, so I am not getting how you apply the different tax rates.

Ahhh - I was not following the steps properly to get to the Schedule D Tax Worksheet. That totally changes the way I figure my taxes. And it will keep me busy for a while! I can't imagine how bad things must be for a complicated situation.

And at about line 31 of the worksheet, I am thinking - are they serious?

And now I finally see how it works! What a pain! Seems you add it in, then go through all kinds of pain to get it pulled out, multiplied by .15, and added back in.