How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3719
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

We live in las vegas but have land in Washington state likely

Customer Question

We live in las vegas but have land in Washington state likely to sell for 400000 it was purchased in 1972 for just over 8000 we are a married couple in our 70's our taxable income last year was 92086 gross and taxable income 69686 please can you give a ball park figure
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
Based on your income, that capital gains tax will be 15%. You must first determine what your actual gain amount is. You do this by taking the cost basis, adding qualified improvements and subtracting the price that the land sold for. You wrote that the the land will likely sell for $400,000, and you paid $8,000 for it. That's a $392,000 gain. Assuming that there were no costs for improvements to be added, the gain amount is $392,000. The capital gains tax would be $58,800. SEE CALCULATIONS BELOW:
$400,000 (Selling price)
$ 8,000 (cost basis)
$392,000 (gain)
$392,000 x 15% = $58,800
Keep in mind that this is just the figure for the gain on the sale, not your entire tax amount. The tax amount on the taxable income amount of $69,686, your ordinary income bracket is 15%.
$69,686 x 15% = $10,452.90
Your total tax should be approximately $69,253. Roughly $70,000 in taxes.
You can refer to the following IRS webpage for more detailed information on capital gains.
Let me know if you require further assistance with this matter.