How to avoid LTCG tax?

[Patrick J.]

If someone made 200k and had 250k in LTCG, then would they would have to pay 25% on the entire 250k since the LTCG is around 441k?

Would their ordinary income rate also go up?

[Ashish Acharya]

Originally posted by @Patrick J.:

@Ashish Acharya

Thanks. Could you sell capital assets in a state with lower tax rates?? For example, cali resident selling in Texas and being taxed 0% for state capital gains .

That wouldn't work. You always have to pick up the entire income in your resident state no matter if you sell assets in the state with no income tax. 

• If you pay taxes in another state, you will get the full credit if your resident state tax rate is lower than the asset source state.
• If your resident state rate is higher, you will get some credit and will pay the difference in the tax rate to your state.