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levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 29558
Experience:  Working for a large tax preparation service
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I own a house in 31 years. i am 65 year old and a low income

Customer Question

i own a house in virginia for past 31 years. i am 65 year old and a low income taxpayer. i rent the house on & off ( live in it for first 20 years) i am single, my taxible income for year 2015 was $34,400. and for 2014 was 36.200. is no capital gain ( 0 rate ) will apply to me, if i sale the house?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  levr replied 1 year ago.

First of all - you need to determine your capital gain.

That is calculated as )selling price) MINUS (adjusted basis) MINUS (selling expenses)
Your basis is original purchase price.

The basis is adjusted by improvements (plus) and depreciation for the time the property was rented (minus).

Then - we need to verify if you are eligible to exclude the gain - you do if the property was your primary residence at least two out of last five years before the sale.

If you are eligible - a part of your gain will be excluded.

.

Then - we need to verify if your total taxable income will be within 15% tax bracket - that part will be subject to zero federal tax rate on long term capital gain.

But if you are pushed into 26% tax bracket - a part of your long term capital gain will be taxed at 15% rate.

But the first step - we need to know

- your purchases price

- your selling price

- and accumulated depreciation you claimed while the property was rented.

Expert:  levr replied 1 year ago.

Then - we need to verify if your total taxable income will be within 15% tax bracket - that part will be subject to zero federal tax rate on long term capital gain.

But if you are pushed into 26% tax bracket - a part of your long term capital gain will be taxed at 15% rate.

But the first step - we need to know

- your purchases price

- your selling price

- and accumulated depreciation you claimed while the property was rented.

.

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I am here to help you with all tax related issues.

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