How will my tax bracket me affected by 1 million dollars in investment returns? 2 Answers as of December 06, 2010

An investment of mine pans out a 1 million dollar payout. I choose to pay taxes (I assume it is 35%) once I cash out. My current head of household taxable income is 47,000. How will my tax bracket be affected from that day or years forward? I see gambling winnings that are, for example, $ 8m, take home is 2.5 m. I am trying to understand, are there more fees and taxes associated with gambling winnings than investment earnings or what should I plan on paying out for a 1 million investment earnings? And how will my future tax bracket be affected?

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Meyer & Yee, LLP
Meyer & Yee, LLP | Kent W. Meyer
Specific details of your investment dictate how your investment could or will be handled. Long Term Capital Gains Tax is 15%. To receive this preferential tax treatment one must hold the investment for a year (i.e. Stock). If for example stock is sold under a years time this would be considered a short term gain and would be taxed at ordinary income.
Answer Applies to: California
Replied: 12/6/2010
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Your tax is based on your income, including investments and gambling income, during the calendar year. The income tax bracket and the capital gains tax is computed anew every year; it does not carry over from previous years. The tax bracket is based on the amount of income during the year, on a graduated scale, although the investment income is a flat rate, depending on whether it is short term or long term capital gain. You should consult with an accountant to have him compute your tax liability.
Answer Applies to: Illinois
Replied: 12/6/2010
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