Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (77976)	1/15/2007 6:28:51 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 206181

i don't know how they define income either. i would guess AGI. in my own case, i had no earned income. just interest income, dividend income, and STCG/LTCG income. It's not so clear to me that so many people with large long-term capital gains will be paying AMT taxes. Or that if they do, the amount will be so very much greater than the 15% rate. i don't think it will affect most people simply because LTCG is not a significant part of most people's income. but that doesn't mean it won't be significant for individuals who make their living largely off capital gains. i still don't understand it very well, but i know at least i was caught and the tax increase was considerable (compared to what i was expecting). i guess part of it depends on how you define "large" LTCG. but as to your second point--that the amount will perhaps not be much more than the widely advertised 15% LTCG rate... according to that second link you posted, which i have read before i think and which i found fairly depressing (and confusing :), if you are caught by AMT your LTCG rate on the increment over which you are "caught" is effectively increased by almost 50%--going from 15% to 22%: "Result? Under the AMT, adding $1,000 of long-term capital gain can increase your tax by as much as $220, consisting of the $150 tax on the gain itself and the $70 that hits you because the exemption amount is reduced. In effect, you're paying 22% on the gain under the AMT and 15% on the gain under the regular income tax, so a big capital gain can lead to a big AMT bill."