Capital Gains Tax at 0%

[Donald Hendricks]

Ok...  I have been alseep at the wheel for a minute, so I am not up to date.

I have decided to sell a rental house that I have had for over 2 years, so it is in the long term catagory.  I am selling because I moved out of state and I worry about the house all the time.  I Googled Capital gains and am reading that if I am married and filing jointly and make less than $78,750 income that my tax liabilty on gains is 0%.

For real?

What am I missing?

[Ashish Acharya]

Originally posted by @Donald Hendricks:

Ok...  I have been alseep at the wheel for a minute, so I am not up to date.

I have decided to sell a rental house that I have had for over 2 years, so it is in the long term catagory.  I am selling because I moved out of state and I worry about the house all the time.  I Googled Capital gains and am reading that if I am married and filing jointly and make less than $78,750 income that my tax liabilty on gains is 0%.

For real?

What am I missing?

You are kind of right. 

 Tax reform changed how LT cap gain is taxed. Before the change, your cap rate depended on your Ordinary income tax bracket. 

Now, your ordinary income tax rate is not a factor in determining the capital gains tax rate. So when you say you make less than 78,750 (It is actually 77,200) income has nothing to do with Capital gain rate. 

If your cap gain is less than 77,200, your cap gain is 0%. LTCG has its one bracket.