The 0% Capital Gain Rate

Long term capital gains on sales are subject to more favorable tax rates than ordinary income like wages. If your 2015 taxable income was under $74,900(filing joint) or $37,450(single), then all of your capital gains were taxed at 0%. It is possible for a capital gain to be taxed at various rates depending on how much ordinary income you have. For example, if you (filing single) have no ordinary income, a capital gain of $500,000,  and taxable income of $493,700 after the standard deduction and exemption deduction, then the tax at capital gain rates would be: $37,450 at 0%, $375,750 at 15%, and $80,500 at 20% for a total of $72,463.  The marginal  income tax rate would be 39.6% or $151,874 in regular tax if it was $500,000 in ordinary income.