I am researching the formulas for calculating Capital Gains on the sale of rental property .
We earn around 32k/year (FIRE'd).
DH wants to sell our Triplex to pay off another rental property.
Will the net of that sale increase our taxable income?
I ask because according to the capital gains calculation, if we earn in the bottom two lowest tax rates (which we do) we do not pay any gains, however if proceeds from the sale count as income, we will jump up to the 25% tax rate and thus will be on the hook for 15% capital gains.
We do have a CPA, but right now it is peak tax season so I thought I'd see if any other investors have experienced this type of transaction and know the answer.
Thanks in advance!