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To: BurbankKarl
preferential 15% capital-gains tax rate IF you don't have to pay Alternative Minimum Tax (AMT),
4 posted on 09/14/2005 1:20:22 PM PDT by Ooh-Ah
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To: Ooh-Ah

You don't have to pay AMT on capital gains, or dividends.

However, the lower rate might set off the AMT on your other income, depending on your mix of low-taxed income and regularly-income.

For example, if you had $1 million in capital gains, and made $200K in salary, you'd probably end up paying the 26% rate AMT on your salary, less the AMT allowance.

If, on the other hand, your income was the same but it was $600K capital gains, $600K salary, you wouldn't owe AMT because you're already paying more than 26% on your salary.

But the first example would still pay less overall income tax.


19 posted on 09/14/2005 2:07:42 PM PDT by proxy_user
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