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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 10110
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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Does couple age 79 have to pay capital gains tax on

Customer Question

Does couple age 79 have to pay capital gains tax on property(with no buildings) owned for 50 yrs. With an income of less than 30,000 annually? I read that they don't. But tax person says they do.
Submitted: 5 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 5 months ago.

Hi,

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This will depend on the size of the gain.

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What many don't understand is that the gain itself is a part of taxable income.

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This means that the gain can take their taxable income to the point where there is some taxable gain.

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For a couple married filing jointly, here are the tax brackets (based on taxable income).

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Married Filing Jointly or Qualifying Widow(er) Filing Status

[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

  • 10% on taxable income from $0 to $18,150, plus
  • 15% on taxable income over $18,150 to $73,800, plus
  • 25% on taxable income over $73,800 to $148,850, plus
  • 28% on taxable income over $148,850 to $226,850, plus
  • 33% on taxable income over $226,850 to $405,100, plus
  • 35% on taxable income over $405,100 to $457,600, plus
  • 39.6% on taxable income over $457,600.

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And then long-term gains are taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket

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So, as you can see, if the gain itself PLUS their other TAXABLE income gets then over 73,800, SOME of the gain would be taxable.

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How much of that 30,000 is taxable will be determined by (1) standard deduction and personal exemptions for married filing jointly and (2) the source of the income ... if most of it's social security then it may not all be taxable ... BUT, this gain (if large enough could easily make SOME of the social security for THIS tax year (the year of the gain)

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If you'd like to provide specifics I can run the numbers for you.

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Bot***** *****ne? (it depends on the size of the gain)

Expert:  Lane replied 5 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

I know it takes an extra step, but JustAnswer won’t credit us for the work until you rate.

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Thank you!

Lane

I have a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice on three continents, since 1986

Expert:  Lane replied 5 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help? If not, olease let me now how else I can help - I so I'd appreciate a positive rating so that I will be credited for the work.

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Let me know…

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Thanks

Lane

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