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Account Closed
  • Rental Property Investor
  • Yuma, AZ
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How much $ do you pay for Capital gains?

Account Closed
  • Rental Property Investor
  • Yuma, AZ
Posted Jul 11 2019, 00:07

How much ____$ do you pay when you get taxed by selling a property?

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Dennis Cosgrave
  • Rental Property Investor
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Dennis Cosgrave
  • Rental Property Investor
Replied Jul 11 2019, 01:53

It usually depends on how long you have owned the property. If you have owned for more than 1 year, then the rate depends on your income. If you owned the property for less tha year, the gain is taxed at normal income rates. 

If you have owned the property for a very long time and taken a substantial depreciation over the time of ownership, you will have to pay a recapture tax assuming the property is sold for more than the net book value. The rate of that tax is 25%. 

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Basit Siddiqi
Pro Member
  • Accountant
  • New York, NY
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Basit Siddiqi
Pro Member
  • Accountant
  • New York, NY
Replied Jul 13 2019, 10:26

@Account Closed

There are many factors that go into how much taxes you pay on the sale of a home. There is no one answer.

Is it a capital asset? if yes - you are potentially going to pay capital gains tax rates(0%, 15% or 20%)
If not, then it is taxed at your ordinary marginal tax rate.

Do you live in a state with an income tax? If yes, you potentially have to add your state tax rate.
Are you subject to the Net Investment Income Tax? If yes, you have to factor this in as well.

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