[USER]

Do you guys know that if you withdraw from the taxable brokerage account do you get to pay capital gains on stocks if you do not withdraw more than 40k a year and you do not work and are retired, do you still have to pay capital gains tax?

I’m seeking clarity on the tax implications for retirees who withdraw less than $40,000 annually from a brokerage account.

Specifically, I’m curious if these withdrawals are subject to capital gains tax.

As retirees often rely on their investment accounts for income, understanding the tax landscape is crucial for effective financial planning.

I’ve heard mixed opinions on whether capital gains tax applies when withdrawals fall below the $40k threshold.

Do retirees need to consider their overall income when determining tax liabilities, or is the capital gains tax only assessed on the realized gains from the sale of investments?

Additionally, are there any specific strategies retirees can employ to minimize their tax burden in this situation?

Any insights or experiences regarding this topic would be greatly appreciated!

[Darin]

I think I understand where you are going with this, but their are tons of additional variables that are not included in your scenario.

In a vacuum with absolutely nothing else in play, the general theme is headed in the right direction, but I am certain that you (like every other person) have additional numbers in additional boxes on your 1040.

More details pls. Thx

[Elizabeth]

You only need to report/pay taxes on the gains above your cost basis. The long term capital gains rate may indeed be zero if your income is low enough.

[Jake]

I’m going to have to make some assumptions here..
You have no other income.

You plan to sell some assets.
You do that.

You can sell as much as you want.

You calculate how much the capital gain is. Sale price – purchase price.

Hypothetical.

You purchased for $40k, you SELL it ALL for $80k.

You made $40k capital gains.

If that’s long term gains (owned the asset more than one year) then you should pay zero tax.

[Author]

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