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Deductions & credits
Q. From what I'm understanding I would still need to pay 15% on any profits that brings my income past $40,525 (2021 number). Do I have this right or no?
A. Yes, but not exactly. The $40,400 amount is taxable income, not your total income or even your AGI. Assuming you get a $12, 550 standard deduction, it's essentially you pay 15% on any profits that brings your income past $53,075. But the depreciation recapture portion of the gain is taxed as ordinary income, not the 15% capital gain rate (probably 22%, but not more than 25%).
‎July 25, 2021
8:42 AM