Urgent question about the potential Senate deal

[Nancy Waterman]

The current proposal is increased taxes on incomes over 400/450,00. There is also an increase for capital gains over 400/450,00. My question is: are these separate? In other words, if someone makes 400,000 in earned income and another 400,000 in cap gains, does he then get an 800,000 exemption from higher taxes? Or is it combined, so that any combo of 400,000 causes higher rate to come in? I think it should be the combined income but I fear they are separate and will therefore give a lot of the 1% exemptions from higher taxes with incomes of 800 to 900,000. Anyone know the answer? A lot of wealthy people combine these two types of income.

[jberryhill]

1. Logically....

It would be based on AGI.

[Nancy Waterman]

2. It is worded as if they are separate

I hope they are combined in a gross income, but i rather doubt it.

[jberryhill]

3. "worded" through two levels of hearsay

[bluestate10]

5. You are right. They have always been separate, that isn't changing. nt

[bluestate10]

4. I think the two are consider separately. The individual higher tax rate falls in at $400,000.

Cap gains will go from 15% to 20%. There are supposed to be adjustments to the inheritance tax and Alternative Minimum Tax. The adjustment to the AMT will be permanent, which makes a lot of sense.