Welcome!


Join more than 151,000 members on FunAdvice to ask questions, share advice, photos and make new friends today.
FunAdvice RSS for this page:
Rss_feed

Capital gains tax rate

Asked by dborrus over 3 years ago, 3 answers.

what is the capital gains tax rate on the sale of rental property

Tech N9ne : one of the great lyricists Answered by master_of_disaster on Oct 16, 2006, 03:03AM
156 answers
Advisor-small

here's what i believe i have understood so far......

If you sold an income producing property after May 5, 2003, your gain will be taxed at the following capital gains rate. For income property held more than one year, investors in a 25% or greater marginal tax bracket will be taxed at a 15% long term capital gains rate and a 25% recapture depreciation tax rate. Investors in a 15% or lower marginal tax bracket will be taxed at a 5% long term capital gains rate and a 15% recapture depreciation tax rate. In 2008, for investors in a 15% or lower tax bracket, the 5% capital gains rate is eliminated for one year and then reapplied in 2009.

EX.

You bought an income property for $500,000 and held the property for 5 plus years. During that period, you claimed $100,000 in depreciation deductions before selling the property for $750,000. Your adjusted basis for the property is $500,000 minus $100,000 or $400,000. Your profit from the sale is $750,000 minus $400.000 or $350,000. If you are in a 28% tax bracket when you sell the property, the $100,000 portion of your gain attributable to depreciation will be taxed at 25%. The remaining $250,000 of gain will be taxed at the capital gains rate of 15%. Your capital gains tax on the sale would be $100,000 times .25 or $25,000 plus $250,000 times .15 or 37,500. For this example, you will owe the IRS capital gains taxes of $62,500 from the sale of your property.

For the above example, if you were in a 10% marginal tax bracket when you sold the property, you would owe the IRS $100,000 times .15 or $15,000 for the $100,000 of depreciation taken and $250,000 times a capital gains rate of .05 or 12,500 for the remaining $250,000 of gain for a total of $27,500.

Answered by dgreath on Apr 12, 2008, 12:35AM
34 answers

To this I would add that you can defer the tax by using the section 1031 method if you are using the proceeds of the sale to buy similar rental property.

Answered by nolosoft on Apr 08, 2009, 12:15AM

Do you mind have a look at TradeMax? A full featured tax software specifically designed for active investors or traders who have multiple accounts to manage their trade data, maximize their gain/loss strategy, prepare their Schedule D.

TradeMax® debuts innovative new tools that enable active investors or traders to effortlessly manage all their trades across various accounts.With customizable Vista® style “Views”. TradeMax® delivers important investment account information right to the desktop, without the need to access Internet. Users can manage their trade data, maximize their gain/loss strategy, prepare their Schedule D. It can import trade data from all kinds of formats files, monitor realized/unrealized gains losses for current positions, adjust wash sales events, report capital gains/losses in printed Schedule D format or export to popular tax software such as TaxCut®, TurboTax®.

All TradeMax® products are available today at http://www.nolosoft.com

Answer this Question: "capital gains tax rate"

Your Answer: HTML is not allowed.


Our members said the answers on this page also answer the following questions:


Cgt rate on recaptured depreciation, 2009 capital gains rates, Pennsylvania capital gains tax rate, Long term capital gains pennsylvania, Pennsylvania captial gains tax rate, Pa taxes long term capital gain, Nebraska state property capital gains tax, Capital gain tax rate on property 2009, What is the formula depreciation capital gains, how much capital gains t, Nebraska capital gains tax rate, Capital gains rate for depreciation portion of gain, What is the capital gains tax rate 2009, Capital gains property tax rate in pa, "long term capital gains rate" rental, 2009 irs capital gains tax rate, 2009 capital gains tax bracket

Jobs & Money Photos

Austin Capital DomeRated RKOrating answers example

Share this question

Copy and paste this code:
It will display on your blog or site like this:
Capital gains tax rate