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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 10135
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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If I own five acres of commercial zoned property in Las

Customer Question

if I own five acres of commercial zoned property in Las Vegas, NV and I sell it for $1.3 million dollars, what if any capital gains taxes will I have to pay. I am not employed and I am over 65.
Submitted: 5 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 5 months ago.

Hi,

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If you've owned the property for more than a year you'll get the lower long term capital gainst rates.

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Long-term gains and qualified dividends 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

...

So some of the dollars will be taxed at 0%, some at 15%, and some at 20% (and there will be additional 3.8% medicare surtax on amounts over 400,000)

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The capital gain is calculated by subtracting your purchase price for the land (plus any selling costs, such as commissions) from the sale price.

...

Expert:  Lane replied 5 months ago.

If you'd mlike to tell me how you file (joinlyl, single, married filing sepoarately, etc) AND what oyu paid for the land, I can run the numbers for you

Expert:  Lane replied 5 months ago.

OK, I still don't see you coming back into the chat here so I'll make some assumptions

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(1) that you file as married filing jointly

(2) That this is your only income

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And that youn purchased for 500,000

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And that this is raw land.

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Expert:  Lane replied 5 months ago.

Attached are the bracklets for married filing jointly

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Expert:  Lane replied 5 months ago.

Using those assumptions, you'd be lokking at a capital gains tax of 151,564.80

Expert:  Lane replied 5 months ago.

Just so you’ll understand where the number came from:

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First it’s important to understand that although there are two sets of rates: one for ordinary income and one for long term capital gains.

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Secondly, capital gain IS a component of “taxable income”

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And the rates are progressive (start low and work their way higher.

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SO, we have

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  • Zero on the first 73,800
  • 15% on the amount from there up to 250K
  • 18.3% from 250 to 457,600 (that’s the 15% plus the additional Medicare tax on amounts over 250,000
  • Then 23.8% on the rest (the 20% capital gains rate plus the 3.8% surcharge that kicked in when your taxable income went above 250,000)
Expert:  Lane replied 5 months ago.

Again, If you'd like to give me your actual purchase price, and your filing status I can runyour specific numbers for you.

...

Lane

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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")

JustAnswer will not credit me for the work unless you do.

Expert:  Lane replied 5 months ago.

You're very welcome ... Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …is thanks enough!

That's the only way I'll be credited for the work here

...

Thank you,

Lane

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