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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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My wife and I are selling our primary residence property in

Customer Question

My wife and I are selling our primary residence property in San Francisco, CA this year. The taxable portion of capital gain after tax deduction will be $400.000.
My only income in 2015 is Social Security which is not taxable.
My wife's income in this year will be $250.000.
My question is how much we are going to pay for state and federal tax on $400.000 capital gain amount if we file for 2015 tax together and how much each of us needs to pay if we share that money ($200.000 each) and file individually.
Thanks,
N.B.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!I assume that your wife's income $250.000 - all from wagesand your income from social security benefits is $25,000Additional long term capital gain $400,000I assume that you are using standard deduction - no dependents - no other deductions or credits and that you both are below 65 and file jointly.So - your estimated tax liability would be $165,800that amount includes - Alternative minimum tax (AMT) $24379- Net Investment Tax $15200MINUS - whatever income tax were withheld from your wife's wages.Please be aware - your social security benefits woudl be partly taxable - specifically 85% of your social security benefits will be included into your other taxable income- as you likely itemize - you actual tax liability might be less - but I do not have any information about your deduction.
Expert:  Lev replied 1 year ago.
Sorry for typo - your estimated tax liability if file jointly would be $160,600that amount includes - Alternative minimum tax (AMT) $24079- Net Investment Tax $15200
Expert:  Lev replied 1 year ago.
Now - let's deal with separate tax returnsI assume that each of you will use MFS "married filing separate" filing status your wife's income $250.000 - all from wagesAdditional long term capital gain $200,000I assume that you are using standard deduction - no dependents - no other deductions or credits .So - her estimated tax liability would be $135,600that amount includes - Alternative minimum tax (AMT) $26950- Net Investment Tax $7600- Medicare surtax $1125MINUS - whatever income tax were withheld from your wife's wages..your income from social security benefits is $25,000Additional long term capital gain $200,000So - your estimated tax liability would be $34,500that amount includes - Alternative minimum tax (AMT) $2343- Net Investment Tax $3657So - your combined tax liability if you choose to file separate tax returns is expected to be ~$10k more compare with filing a joint tax return.Let me know if any of my assumptions should be corrected.