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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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How much tax will my wife and I pay on our vacation home where

This answer was rated:

How much tax will my wife and I pay on our vacation home
where we have a gain of 2,293,000?
Thanks for using! I will do my best to provide you with a clear and concise answer to your tax question based on the information that you have provided.

The exact amount will on you other income. Capital gains are taxed at three rates, 0, 15, and 20 percent. The three rates are tied to your total taxable income and the regular tax brackets that would apply to you. If your regular taxable income is under the 15% regular tax bracket, you would use the 0% capital gains rate until your total taxable income reaches the 25% bracket, the 15% capital gains rate until your total taxable income reaches the 450,000 dollar mark, and the 20% capital gains rate on all gain that raises your total taxable income above 400,000 dollars.

For simplicity sake, I am going to assume the first 400,000 dollars is in the 15% capital gains bracket. However, the total tax could be larger because the higher your non-capital gain income the larger the capital gains tax. This would produce a Federal capital gain of roughly 605,000 dollars, and CA would take a 305,000 dollar cut.

If there are additional questions or concerns, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between OK and Excellent so that I may receive credit for my work. Thanks for your business.
Customer: replied 4 years ago.

Last years AGI was 764,934

Taxible Income was 584,742

Tax paid was 100,078 or 12.15% effective tax rate.


Does this help you get closer if these numbers are nearly this year?



Thanks for the additional information.

The Federal rate will be 23.8% (including the Obama-care Medicare surtax on investment income) on the entire gain for a total of 545,734 dollars (my apologies for mis-entering the amount in the previous answer). The CA state amount is the same as the prior answer -- 304,969 dollars exactly.

Let me know if this helps.
Phillip B, EA and other Tax Specialists are ready to help you
Customer: replied 4 years ago.



Where are you located? My daughter just received a request from the IRS for a complete audit. they requested to do it in her home. she lives alone and is scared to let a man come to her home. He wants to tour her house???


She needs representing at the audit. She lives in Salt Lake City.


Seems like you do this kind of work?



I would recommend she go to the NAEA website ( find a enrolled agent near her. Although I live in southern Utah, my agreement with this site prohibits me from taking engagements through website customers. I am involved in the Utah EA organization and I know there are quite a few great enrolled agents in SLC that would do a great job representing your daughter.