 So now this is a simplified worksheet because there could be weird scenarios when you kind of match up the short-term and long-term capital gains and so on but let's just this is what we're going to do for now. So I'm going to say okay on the on the long-term capital gains we sold shares and the sales price we said it was 1,000 and the cost was I think 300 so the difference is calculated at that 700 which is I'm going to have to pull back to my formula it's going to be included in line one so I need to double click on line one go to the end of it I'm going to add that whole schedule D populating it into my my summary worksheet so I'm going to say pull that in from the schedule D which is this one I need to name the worksheet this is going to be I'm going to double click on the worksheet and call this schedule D schedule D cap gains something like that so then that pulls in over here so there we have it so now we've got the now notice this is another area where we're basically we had kind of you might think of an expense right because over here I had this is like the gross income and this was the cost or or what I needed to expand in order to get the income so we don't we're not going to say that gross income is pulled in we've got kind of you might call it a deduction the cost to get to the net income in essence the gain or loss which is pulled into line one of the income tax formula we still have the 12,950 here that's the 87 750 which should match so 87 750 page two I'll let the calculation of the software work 14879 so 14879 I'm going to put the old number here so 14774 has been changed to 14879 so notice the difference between those two is now uh 500 uh five 105 on a $700 increase so there's a $700 increase that increased the tax 105 so what's the rate on that 715 percent so notice here that the average rate is is 17 percent if I go back to my tax software and I say okay let me look at my tax summary to look at my rates then notice the marginal tax rate is actually 22 percent so you would expect that if it was applying the ordinary rate it would be applying that 22 percent but it's picking up because I'm in this threshold of the income threshold it's picking it up at 15 percent taxing at the favorable tax rate of 15 percent instead of the 22 percent we could see that if I go to the 1040 page two and look at the worksheet here and see the calculation on the 700 it's kind of pulling it out separately so that calculation is quite complex because now we have a progressive tax system and also these other types of income now including long-term the long-term benefits more than offsetting the one time cost for capital gain which could also include dividends that is completely separately calculated from the tax than the normal progressive rates so you're probably not going to do that calculation yourself but you want to be able to explain that difference on the capital gains and take into consideration that difference when doing you know tax planning and that kind of stuff now let's go back on over and let's say that it was short term so let's say it was short term and say that the that we bought it in uh one January of 2022 so we sold it within a year so now it's short term therefore same impact on the net income but the tax rates should be at ordinary income rates now it's up top at the short term portion and then if I go to the form 1040 it pulls over if I if I do that here I'd say okay now let's reflect that here I'm just going to say now it's not on the long term let's cut this and just paste it right there boom it's on the short term no difference to the first page of the form 1040 in terms of the income but the tax will will change so if I go back on over and say okay page two tax is now at the 14928 so I'm going to put the 1414928 so that minus that means that on the $700 we had an increase of 154 so it taxed it at the 22 percent which is the marginal tax rate the highest tax rate that's what we would expect and anytime there's a change in income it's going to be taxed at that higher or marginal tax rate now so that obviously gets more confusing it's fairly straightforward here but it gets more and more confusing if you had short term and long term gains right because in the short if they were both gains the short term and the long term would be taxed at different rates but what if you have a loss like a short like a like a short term gain and a long term loss or something like that then when you cancel them out against each other you have that's where you get to get these funny rules because because there's different tax rates on the on the two right so if you have most short term and long term that cancel each other out you get into kind of some weird scenarios I won't dive into all of them at this point we might touch on them a little bit more later but for now I also just want to point out that if you have multiple uh if you have multiple shares if you're dealing with a day trader then you would have to enter like all of the shares in order to populate properly into the software instead of doing that you might just you might just say this is this is the quantity a number of shares from and you might say this is from the e-trade e-trade trade c attached attached for detail or something like that and then you could and then you could say this whole thing is going to be the short term portion from e-trade and then you might say that you had I'm just going to summarize all the long term this is going to be e-trade which I'm not sure I spelled right e-trade long term portion and then in the cert tax software I think if you put a negative in front of these fields it'll show us a very date so I'm going to say this is e-trade and then this is uh what is it doing there e-trade it won't let me delete that one thing long term oh my goodness e-trade c attached for detail long term negative and let's make this 010100 and negative 060622 and let's say we we sold uh you know 10 10 000 here and the cost was 3000 so so then I summarize these up and possibly attach then uh an attachment showing all the detail if I need to to provide that detail so I'm not entering in a hundred different lines right because the major tax consequences are whether or not their short term or long term if I make this pull over