Capital Gains and Losses
Capital Gains Tax Questions? Ask a Tax Advisor for Answers ASAP
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.
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