If i put capital gains toward the mortgage of my residence of 5 years will i still have to pay the 15% tax..?

Question

I live in Virginia

Answer 1

by the manner in which you state your question, i THINK that you mean capital gains by selling stocks or bonds. (???) if such gains were attained by selling investment real estate, it would be a different ball of wax. so i will answer based on your description:

if you had attained capital gains on investment real estate and then put them into a special escrow account whereby you effectuated a 1031 starker, tax deferred, exchange for any other real estate investment, then you would already know the answer. if you did not use all of your capital gains towards the purchase of the trade property, then you would pay taxes on the "boot." else, which is what i believe you mean:

if you mean that you made money on selling stocks or bonds, yes, of course you must pay income tax on the capital gain. it does not matter what you spend the gain on. it is taxable income. whether or not it is your stated 15% depends on your tax bracket.

always consult your tax professional in these matters.

Answer 2

Please enlighten me how do you put capital gains toward the mortgage? I'm at a loss to understand how that works.

Answer 3

You pay income tax on your income. It doesn't matter to what you put your income, you still owe tax on that income. You may get deductions if you put some of your income to charitable donations, however you still owe tax on your income.

Answer 4

I believe you would still pay in this situation.