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We have $400,000 in capital gains for the sale of our

Customer Question
California home of JA: The Expert...
We have $400,000 in capital gains for the sale of our California home of
JA: The Expert will know how to help. Please tell me more, so we can help you best.
Customer: 30 years. How much do we owe in taxes from federal, state and any other taxes?
JA: Is there anything else the Expert should be aware of?
Customer: No.
Submitted: 1 month ago.Category: Tax
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10/12/2017
Tax Professional: Lev, Tax Advisor replied 1 month ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,287
Experience: Taxes, Immigration, Labor Relations
Verified

If that home was used as your primary residence at least two out of last five years - and if you are filing a joint tax return as a married couple - you might be eligible to exclude up to $500k of the gain from taxable income.

Same exclusion rules apply to state income taxes.

In this case you would not have any tax liability on that sale.

Let me know if you need any clarification this matter.

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Customer reply replied 1 month ago
The $400,000 is after all deductions.
Tax Professional: Lev, Tax Advisor replied 1 month ago

you meant - after allowed section 121 exclusion - correct?
So that will be taxable long trem capital gain.

It will be added to your other taxable income.

Tax rates are 15% and 20% depending om other taxable income, filing status, deductions, etc.

I will estimate if you provide amounts.

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Customer reply replied 1 month ago
We are in the 15% bracket
Customer reply replied 1 month ago
The $400,000 is after all deductions. We are in California.
Tax Professional: Lev, Tax Advisor replied 1 month ago

Yes - but $400k in additional taxable income will push you into higher marginal tax bracket - you are no longer in 15% tax
So to estimate - we need to know - your TOTAL income,

separately your long term capital gain.

The amount of itemized deduction if you itemize, etc.

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Customer reply replied 1 month ago
Total income is $75,737.00. Adjusted gross income is $55,403.00. Total itemized deductions is $38,441.00.$400,000 is long term capital gain.
Tax Professional: Lev, Tax Advisor replied 1 month ago

I just run estimations...

Your Adjusted Gross Income (AGI):$455,400

Your itemized deduction will be limited to $34,118

Results will be

Regular Tax:$54,162

Net Investment Tax:$7,805

Total federal tax liability is expected to be $61,967

.

California doesn't have reduced rates for long term capital gains

and your estimated state tax liability will be ~$37,000.

Let me know if you need any further help.

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Tax Professional: Lev, Tax Advisor replied 1 month ago

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues.

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Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,287
30,287 Satisfied Customers
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