Capital Gains and Losses

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What is the estimated capital gain tax for a rental property…

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What is the estimated...

What is the estimated capital gain tax for a rental property sold for $402k

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. Please tell me more, so we can help you best.

My plan is to take the money from the sale and purchase a residence that I will live in - the investment will be put right back into property

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I owe $19k on the rental

Submitted: 8 months ago.Category: Capital Gains and Losses
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Answered in 16 minutes by:
10/18/2017
Tax Expert: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 8 months ago
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,529
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Welcome to JustAnswer! My name is ***** ***** I will be able to assist you today.

To determine what capital gains tax would be on a property that sold for $402K we would need additional information

This information would include but not limited to your ordinary income tax bracket, cost basis in the property, holding period and any depreciation you that was "allowed or allowable."

However, I will give you an estimate for a the sale of a rental property only considering the information you gave me concerning the sale price and that you owe $19 K.

Capital gains are taxed move favorable rate than ordinary income. You would generally pay capital gains tax at 0%, 15% or 20% of net profit.

Long-Term Capital Gains tax rates

For taxpayers in the 10% or 15% ordinary income tax bracket-- 0% LTCG

For taxpayers in 25%, 28%, 33%, 35% brackets--15%

For taxpayers in 39.6% bracket--20%

Assuming you are taxed in the ordinary income tax bracket of 25%, 28%, 33% or 35% your long term capital gains tax would be 15%.

$402K - $19K = a net profit of $383K taxed at 15% = tax due of $57,450

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Tax Expert: Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional replied 8 months ago

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