How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3991
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I have a business that I may sell for $950,000. Almost most

Resolved Question:

I have a business that I may sell for $950,000. Almost most all of this will be capital gains.

My income is very low (about $25,000/ year). How do I figure out my capital gains? Or Can you tell me what my tax rate on the capital gains may be? Do you need much more information?
Submitted: 10 months ago.
Category: Tax
Expert:  Lane replied 10 months ago.

Lane :

Hi,

Customer:

Hi

Lane :

You'll be at the top capital gains rate of 20%

Lane :

Capital gains are based on income tax rate but the gain amount is use to calculate that

Lane :

Then thanks to our president, we have the new 3.8% Medicare tax that is applied as well to this in that capital gains tax bracket

Lane :

so worst case, you're looking at 23.8%

Customer:

If my income tax rate is near zero, does that make a difference?

Lane :

So sorry, but the capital gain amount itself is used

Lane :

Hang on and I can get you some docuentation if you like

Customer:

Okay, I heard that there was a tiered rate.

Lane :

Their is for income taxes... see this ... AND let me check the regs for application

Lane :







































Other capital assetsordinary tax rates0%, 15%, or 20%3.8%
10%0%
15%0%
25%15%
28%15%
33%15%3.8%
35%15%3.8%
39.6%20%3.8%
Lane :

Here's an excellent, more readable, overview ... now, let me get you the IRS regs themselves :http://taxes.about.com/od/capitalgains/a/CapitalGainsTax_2.htm

Customer:

Okay, so my hopes that I was below the 15% income tax would mean that my capital gains would be zero, is not possible.

Lane :

No no,,, so sorry, but the gain itself is used as the income in the calculation

Lane :

Here's an article that deals with this aspect .. botXXXXX XXXXXne is that once you go through the calculation you'll see that it INCLUDES the GAINS as INCOME but forces out any ORDINARY income taxation but the capital gains rate is applied to all of the capital gains income

Customer:

Thank you for your help & have a good day.

Lane :

]you'e very welcome

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Customer:

This was excellent!

Lane :

Thank you so much!

Customer:

DF

Customer:

ES

Customer:

Is there any truth to this article?

Customer:

Sorry

Customer:

Didnt mean to send that many times

Lane :

sOK, Just a sec...let me look at it ... I think it only applies to those in the lower tax brackets where the rate becomes zero ... What you have to remember is that you tax bracket is calculated on taxable income ... and capital gains income IS taxable income ... you're is a very atypical case, where the gain is so high ... but again, let me look

Lane :

Yes, they don; really cover your situation ... note that the two main headings are cashing in on "lower capital gains taxes" and "Limited to lower incomes"

Lane :

You do may a much lower RATE (becase it's the 20% rather than the 39.6%) BUt capital gains IS a part of taxable income, to figure your bracket

Lane :

Note the second sentence, " Capital gains are generally included in taxable income but are often taxed at a lower rate." in this article: http://www.taxpolicycenter.org/briefing-book/key-elements/capital-gains/how-taxed.cfm

Customer:

Thanks again. I think that is it for now.

Lane :

YW

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3991
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 5 other Tax Specialists are ready to help you
Expert:  Lane replied 10 months ago.


Thanks much Dirk,

I'll look up the actual IRC citation for you too.

... just check back here.

Lane

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.