In short, a capital gain can only push capital gains into higher capital - gains tax brackets; it can not
push ordinary income into higher ordinary - income tax brackets.
Not exact matches
No, the tax rates apply first to your «
ordinary income» (
income from sources other than long - term capital gains or qualifying dividends) so these items that are taxed at special rates won't
push your other
income into a higher tax bracket.
Notably, this is actually the most favorable sequence possible, as it ensures
ordinary income (which is otherwise taxed at the highest rates) gets the lowest brackets; while the long - term capital gains do get
pushed into the «higher» brackets, since long - term capital gains are already eligible for preferential tax rates, this still comes out with the greatest tax savings.