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Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2430
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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We have sold an income property and have a gain of $75,000.

Customer Question

We have sold an income property and have a gain of $75,000. We have purchased property and built a new rental home in excess of sale price of sold property. We also have a business that has a net loss. We are recently retired and trying to get covered Calif health insurance so we need to now how MAGI and AGI will effect our tax bot***** *****ne for insurance purposes. Thank you Tom
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.

Hi Tom

I'm Anne. I've been preparing taxes for 27 years and I'll be happy to help you.

Unfortunately, there's not alot of detailed information in your question, so I can only give you generalities.

The $75000 gain from the sale of the rental property can not be offset by the new rental home that you built. I know that years ago you could "roll" your gain from one rental property to another as long as the new property cost more than the one you sold. That law is no longer valid, so the full $75000 gain will be a part of you AGI and your MAGI

However, your business loss will ultimately be netted against the $75000 gain on the front page of your 1040, so this will lower your AGI and MAGI.

I hope this answer helps you

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