Capital Gains and Losses

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W-2 income is $15k, am selling rental for grand kids

Customer Question
W-2 income is $15k...

W-2 income is $15k, am selling rental for grand kids tuition. Cost $36k 23 yrs ago selling for $136k. Depreciation of $30k. Is the cap gains tax 0% because my regular income tax is below 15%

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

IS the gain on sale included to determine my marginal tax rate or is my W-2 income of $15k result in 0% capital gains tax?

Accountant's Assistant: I love the idea of making big money with investments, but there are so many things that could go wrong. The Accountant will be able to help you. Is there anything else important you think the Accountant should know?

Just whether the Capital gains is used to determine my marginal rate,,,or if my regular W-2 income of $15k keeps me below 15% marginal rate, will the LTCG tax be 0%.

Submitted: 10 months ago.Category: Capital Gains and Losses
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9/30/2017
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,768
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Welcome to JustAnswer. My name is ***** ***** I will be able to assist you today.

You are correct that your Long Term Capital Gains Tax would be 0% for taxpayers in the ordinary income tax bracket of 10% or 15%.

The ordinary income tax rate is determined based on your Adjust Gross Income.

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

Capital gains is determined separately from your Adjusted Gross Income that is used to establish your ordinary income tax bracket, which is why the tax rate is different.

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

If you have any further questions please let me know.

If you are satisfied with this answer, a positive rating by clicking on three stars or more would be appreciated.

Thank you!

Ask Your Own Capital Gains and Losses Question
Customer reply replied 10 months ago
Am retired and am selling a rental condo with LTCG of $125k to help grand kids college tuition. but as my W-2 income is only $15k I wanted to be certain that the LTCG of $125k is not included to arrive at my regular/marginal rate. And so my income bracket from W-2 income of $15k would render a zero LTCG tax. Just wanted to be certain
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

I would be happy to speak with you to answer all of your questions. Please try your payment again.

Thank you!

Ask Your Own Capital Gains and Losses Question
Customer reply replied 10 months ago
Phone option not working,........pls advise i.e.
Am retired and am selling a rental condo with LTCG of $125k to help grand kids college tuition. but as my W-2 income is only $15k I wanted to be certain that the LTCG of $125k is not included to arrive at my regular/marginal rate. And so my income bracket from W-2 income of $15k would render a zero LTCG tax. Just wanted to be certain
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

Long term capital gains is determined separately from your W2 income.

As long as your total income (not counting your long term capital gains) places you in the 10 or 15% federal tax bracket then your effective long term capital gains tax rate will be 0%

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

Other income is included to arrive at your adjusted gross income. For example a portion of your social security may be included in your adjusted gross income, if you are currently receiving social security.

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

Single tax payers may have adjusted gross income up to $37,950 which would place them in the 15% federal tax bracket and therefore be subject to 0% LTCG tax rate

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

If you have any further questions please let me know.

If you are satisfied with this answer, a positive rating by clicking on three stars or more would be appreciated.

Thank you!

Ask Your Own Capital Gains and Losses Question
Tax Expert: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 10 months ago

Since you have no further questions please take a moment to accept the answer so I may be credited assisting you and clarifying your question

Thank you

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