Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!
Please be sure that you correctly determine the capital gain.The capital gain = (selling price) - (basis)
The basis is mainly your purchase price - assuming the property was purchased - and should be adjusted by improvements and some other expenses.
If the property was received as a gift - you need to consider the donor's basis.
You will report the sale transaction on schedule D - www.irs.gov/pub/irs-pdf/f1040sd.pdf - in Part I or Part II - depending how long you owned the property - more or less than a year.
If you owned the car more than a year - the gain will be long term capital gain - taxable at reduced rate - not more than 15% on federal level.
There will be additional Virginia state income taxes - 5.75% for income above $17,000.
Generally - your tax liability is based on your total income, filing status, deductions, etc - however as a raw estimate - you may expect following tax liability on long term capital gain:
--federal income tax $135,000 * 15% = $20250
--Virginia state income tax $135,000 * 5.75% = $7762.5
Let me know if you need any help or clarification.
Please reply with additional questions.