my normal tax bracket is close to 0 as depreciation covered my income. ihave heard that capital gains will be taxed at capital gain rates or my ordinary income rate which ever is lower. Is that true.
2006-11-28 17:46:41 · 6 answers · asked by lee t 1 in Business & Finance ➔ Taxes ➔ United States
I'm assuming that you are selling a property that you have been depreciating. I don't know if you are a real estate professional who has been writing off your losses as you go or a passive investor, but I will assume a passive investor.
You Willl compute your gain on the sale of the property under normal rules. You gain will then be taxed at 25% to the extent of depreciation taken on the property that you sold. Any gain above this depreciation amount wil be taxed at the 15% capital gains tax rate.
In addition this gain will be passive income that will allow you to use your passive losses to the extent of the passive gain which is deductible in full on your return as an ordinary loss.
2006-11-28 22:35:10 · answer #1 · answered by waggy_33 6 · 1⤊ 0⤋
What your tax rate is normally doesn't matter. Capital gains taxes depend on your rate for the year the capital gain occurs - you'd be taxed at either 5% or 15% depending on your income for that year, unless your income for the year including the total capital gain still leaves you owing no taxes, then you wouldn't owe anything.
2006-11-29 13:36:05 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
You will be taxed at capital gain rates.
2006-11-28 17:48:50 · answer #3 · answered by Dr Dee 7 · 1⤊ 0⤋
Talk to your advisor in your state! Also, go to www.savingthousandsininterest.com , I believe this may be an additive to your business! Sell the property and show them how to pay it off quickly!
2006-11-28 17:56:04 · answer #4 · answered by Anonymous · 0⤊ 0⤋
in case you reside in it (constantly) as your significant or basically homestead, then you basically isn't accountable for CGT. no count if it is not your place then i've got faith which you would be doubtlessly accountable for CGT (watching the income) in spite of ways lengthy you own it. See the HMRC web page for greater recommendations. by making use of the way the £250k threshold suggested above is incorrect. what's significant for CGT is the quantity of the income, not surely the fee of the valuables, and the edge is at present £8,500.
2016-12-17 18:06:30 · answer #5 · answered by ? 3 · 0⤊ 0⤋
it depends which state you are in.
talk to a tax advisor about your options.
2006-11-28 17:48:47 · answer #6 · answered by Curious George 4 · 0⤊ 2⤋