Author Topic: Tax on long term capital gains  (Read 395 times)

Riptoast

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Tax on long term capital gains
« on: October 17, 2018, 08:54:02 AM »
I understand the separate tax brackets for long term capital gains, and how to compute it in most scenarios. But what if I have 0 earned income in a given year but realize 100k profit in long term capital gains from selling an investment property? Filing single, would I get the first $12,000 (standard deduction) at 0% tax, then the next $38,600 at 0% (long term cap gains rate), leaving only $49,400 to be taxed at 15%? Or since my income from the single 100k sale puts me into the $38,601-$425,800 income bracket, would I have to pay the whole 100k at 15%? Or 100k - 12k standard deduction = 88k at 15%?

terran

  • Handlebar Stache
  • *****
  • Posts: 1555
Re: Tax on long term capital gains
« Reply #1 on: October 17, 2018, 09:39:25 AM »
Filing single, would I get the first $12,000 (standard deduction) at 0% tax, then the next $38,600 at 0% (long term cap gains rate), leaving only $49,400 to be taxed at 15%?

This one.

Don't forget any dividends you might get from other investments.

Riptoast

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: Tax on long term capital gains
« Reply #2 on: October 17, 2018, 09:41:54 AM »
Awesome, thanks!

oldmannickels

  • Stubble
  • **
  • Posts: 156
Re: Tax on long term capital gains
« Reply #3 on: October 17, 2018, 09:59:21 AM »
Does the 100k capital gain include depreciation recapture? The portion of the gain that is recapture is taxed at ordinary rates.