As you held the property more than a year - the gain will be treated as long term capital gain - which is taxed at the tax rate not more than 15% - thus your tax liability on $180,000 net capital gain will be up to $180,000*15% = 27,000 (plus CA state income tax)
In additional - part of your capital gain that will be otherwise taxed at 15% - will not be taxable
To determine that part - we need to know your filing status, dependents, other deductiosn you normally claim
Hi Lev,Why wouldn't I be taxed in the 10% bracket, if my "taxable income" is
less than $8000?
Your net profit from teh sale of stocks as you originally pointed was $180,000 - that is your taxable income - and it is way more than $8000
oh, so capital gains taxes are taxed as "taxable income" after the first $8000?
If - for instance - you are single, no dependents, or other deductions - and $180,000 of your long term capital gain – is your only income - $8000 will be your personal exemption and standard deduction.
Then – income $34,000 that will otherwise taxes at 10% or 15% - will not be taxed (because that is long term capital gain)
Other income $180,000 - $8000 - $34,000 = $138,000 will be taxed at 15%
So in this eample - your federal tax liability would be $20,700
great! thanks so much for your help!