I have self-prepared my taxes for 25 years with TurboTax; but this year we’ve been presented with a (good) situation that I need help with: Years ago, my wife was given a 1% share of stock in her company as it was growing. When it sold in 2015, she was paid out $642,000 as her share. The income from our two W2s is $205,000, with a tax liability (MFJ) of $39,000. When I add this 642K amount as a long term capital gain, the total tax liability jumps to $191,000. In other words, capital gains tax on the $642K is $152K! I was shocked, because I thought capital gains tax was 15%, or $96,000! Upon careful investigation and research I discovered that we went into a higher tax bracket for the capital gains, as well as attracting the 3.8% Medicare surtax, and also Alternative Minimum Tax. Is this correct, and is there any way to lower this tax burden?