USA Capital gains bracket include the gain?

[Livingbliss]

Does the income used to determine your tax bracket for capital gains include the gain you are realizing?
My specific situation is capital gains from sale of my primary residence which will result in high taxable gain (after exempted amts etc). Considering selling after retirement to drop down into 0% range. 15% of taxable portion of gain is more than my normal annual income.

 

[DrStrangeLove]

If I remember correctly, the 0%/15%20% breakpoints are fixed numbers in the Schedule D Tax Worksheet in the instructions to Schedule D in order to avoid this circularity problem. So conceptually, the breakpoints shouldn't include the taxable gain. But you (or your accountant) might want to double-check the instructions at the IRS website to make sure.