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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 53669
Experience:  29 years of experience as a tax, real estate, and business attorney.
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Can you tell me the capital gains tax on 490000 dollars earned

Customer Question

Can you tell me the capital gains tax on 490000 dollars earned from real estate sale and not being used for a 1031 exchange.. percentage of total gain?
Submitted: 3 years ago.
Category: Tax
Expert:  Richard replied 3 years ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. Did this sale occur in 2012 or 2013? Thanks.
Customer: replied 3 years ago.

i will be selling in 2013

Expert:  Richard replied 3 years ago.
Thanks so much for your reply. For 2013, the tax laws concerning taxation of long term capital gains are as follows:

0% applies to long-term gains if a person is in the 10% and 15% tax brackets,
15% applies to long-term gains if a person is in the 25%, 28%, 33%, or 35% tax brackets, and
20% applies to long-term gains if a person is in the 39.6% tax bracket.

Also, in 2013, capital gain income will be subject to an additional 3.8% Medicare tax for taxpayers with income at or above a certain threshold. This 3.8% Medicare surtax applies to taxpayers with “net investment income” in excess of threshold income amounts of $200,000 for single filers and $250,000 for married couples filing jointly.

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Customer: replied 3 years ago.

actually, your answer did not take into account the definition of capital gains as regards to sale of real estate.. that is, definition of same.

as i now understand it from another source, CG is defined in relation to original sale price, versus current sale price etc.

Expert:  Richard replied 3 years ago.
Thanks for following up. You asked me for the tax rate percentage on the total gain. When you used the term gain, I presumed you had calculated the gain. The gain is not the total proceeds from sale; rather the gain upon which these tax rates apply is the sale price (less closing costs) in excess of the basis of the property. I'm sorry for the confusion.

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