Capital Gains Question
suppose i sell a house i've been renting out after a year.
i pay cap gains on the profit.
if my income is below a certain level, i understand my
cap gains is lower than 15%.
now supposing i made only 10K from my job. so i'd be paying the lowest cap gains tax.(is it 5%??) but i made 70K from the sale of a rental. wouldnt that throw me into a higher tax bracket and thus force me to pay the 15% tax????
also, does california state tax consider capital gains treatment or is everything income tax subject to the 9% maximun bracket?
Quote:...supposing i made only 10K from my job. so i'd be paying the lowest cap gains tax.(is it 5%??) but i made 70K from the sale of a rental. wouldnt that throw me into a higher tax bracket and thus force me to pay the 15% tax???? Yes. Another reason to seriously consider a 1031 tax-deferred exchange.
Right go ahead and sell the house and then exchange it for a property worth more than the one you sold and your golden.