$40K tax bill seems off

[Andrey Y.]

I just got a draft from a CPA, that I need to write a check of $40K for taxes.

I have in my email where he said even if I don't do a 1031 exchange, my capital gains will be offset by passive carryforwards. I've had issues with this particular CPA taking 3-4 weeks to respond to emails and generally giving off the cuff, not researched, and flat out wrong tax planning advice.

Anyway, I had a partially failed exchange (Realty Doctors promised they have NEVER missed a clients exchange, and lo and behold their builder couldn't build the 2nd property in time).

My only gains are a $102K undeferred gain on the property I sold, and a single K-1 syndication exit where I invested $50K and got a $30K profit.

When I look at the draft return, my capital gains from the sale of my home are being added to my AGI and I'm having to pay ordinary income taxes on sale of a long term capital gains asset. That seems very off to me.

[Basit Siddiqi]

Originally posted by @Andrey Y.:

Originally posted by @Michael Plante:

Very confused what you actually have to declare

bottom line how much income from ALL sources for the year?

 Why is this relevant? If my top tax bracket is say 24%, then I am paying 24c on the last dollars of my W-2. However, disposal of a real estate asset should result in long term capital gains tax of 15%. So why is my day job income being lumped in with my passive and active real estate capital gain? That is what doesn't make sense.

because it is relevent.

Long-term capital gains are not just taxed at 15%...they can be taxed at 0% or even 20%.
Furthermore, there is a potential 3.8% net investment income tax.
Furthermore, there is depreciation recapture which is taxed up to 25%

Talk to your CPA and have him explain the return to you where you have the opportunity to ask him these questions.