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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 11184
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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How can i figure an estimate of what the capital gains tax

Customer Question

how can i figure an estimate of what the capital gains tax would be on the sale of my rental property
Submitted: 7 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 7 months ago.

Hi. My name's Lane. I can help here.

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First (may be stating the obvious) capital gain = sales price - basis

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And although basis in real property is essentiall what the investor has IN the property (purchase price plus improvements), for a rental property owner, the depreciation that was taken (of should have been) is a subtraction from basis (therefore increasing gain).

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Making basis = purchase price + improvements - depreciation

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What this also means is that, for landlords selling a rental, there are differing levels of capital gain rates ... (the non-depreciation part of the gain being taxed as any other long term capital gain).

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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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But the depreciation recapture part of the gain is taxed at 25% (an everage ordinary income tax rate that's applied because depreciation was taken as a deduction against ordinary income).

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Please let me know what quetions you may have from here

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Lane

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Expert:  Lane replied 7 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 stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here

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Thank you!

Lane

I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 7 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 this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

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But again, let me know if you need more here.

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Lane