| Does the capital gain from the sale of my house impact my tax bracket (see details below)?

Does the capital gain from the sale of my house impact my tax bracket (see details below)?

Dae-su Oh asked:


Assume I sell my house and have to pay capital gains. Assume that, not counting the proceeds from the sale, I am in the 15% tax bracket. Will I have to pay 5% on the capital gain, or will the sale push me into a higher bracket, forcing me to pay 15% capital gain?

I’ve found information on the internet indicating that the sale pushes me into a higher tax bracket, forcing me to pay 15% capital gains. That seems questionable, as every sale (of a house at least) would push all 5% payers into the 15% capital gains bracket.

Here’s a link: http://www.bankrate.com/brm/itax/tips/20010305a.asp?caret=14#5

Thanks!

Dae Su Oh
Thanks for the answers, but the property is rental property. I’m aware of the exemptions, and like-kind exchanges, etc., but none of those strategies are available to me.

Related posts:

  1. In Maryland what is a sale and use tax license for? deserae007 asked: I am looking to start a sole proprietor...
  2. What affect does Internet purchasing have on local governments and sale tax revenues? Cotton Eye Joe asked: Do you ever feel guilty that...
  3. can someone please tell me what the canadian sales tax is? JAMES asked: what i want to know is do tourists...
  4. How would I be categorized politically? ? anonymous asker asked: I support unborn rights and would support...
  5. How would I be categorized politically? anonymous asker asked: I support unborn rights and would support...

Filed Under United States |

Tagged With , ,

Comments

3 Responses to “Does the capital gain from the sale of my house impact my tax bracket (see details below)?”

  1. girlwhoknowsitstrue on April 10th, 2009 12:18 am

    I think you’re mistaken.

    If this is your personal residence, and you’ve lived in it 2 of the last 5 years and met other qualifications, selling it is a TAX FREE event!

    If it’s rental property, move into it for a couple of years before you sell it, and you can make it into a TAX FREE event.

  2. big bad b on April 10th, 2009 10:01 pm

    If you have lived in your house as a primary residence 2 of the last 5 years you are free of capital gains $250k single, $500k per couple. Assuming that you have been in less than 2 years but more than 1 you will have a capital gains of somewhere around the 15%. less than 1 year in a higher tax rate I believe, 25-30%.
    Good luck

  3. NotEasilyFooled on April 12th, 2009 7:05 pm

    If you are in the 15% bracket, you pay 5% on the part of your gains that “fit” inside this bracket, along with your regular income. You would pay 15% on the rest.

    Example: if you are married filing jointly, in 2006, your “ordinary income” tax brackets are:
    10% on the first $15,100 of taxable income
    15% on $15,100 to $61,300
    25% on $61,300 to $123,700
    if your ordinary taxable income is $40,000, and you have a $100,000 long-term capital gain on your real estate, you would pay:
    10% on the first $15,100 of your ordinary income,
    15% on the remaining $24,900 of your ordinary income,
    5% on the first $21,300 of your capital gain (the difference between the top of the 15% bracket and your $40,000 of ordinary income), and
    15% on the remaining $78,700 of your capital gain.