I have had a few other posts started here that have helped me along on my journey, and ultimate goal of retireing AUGUST 4th (early)! I have one lingering question (for now), and what I mean by lingering is I just cannot get comfortable with a final answer based on my research. So, here is the question:
Does the profit on the sale of my rental property affect the tax bracket that I am in (assuming the profit is enough to nudge me into the higher bracket if it does count)?
I'm already clear on the recapture and other long term capital gains (LTCGs) work and calculations, but this particular point I am not. The reason I am asking is that I will pay zero in LTCGs as long as I remain in the 15% or lower tax brackets. So if the profit causes me to reach a higher tax bracket than I lose that benefit. If it does not and my bracket stays the same regardless of the profit, then great.