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Business & farm
To add to Carl's post ... the depreciation recapture is taxed at a max of 25% and the cap gains at a max of 15% or 20% and the ordinary income at the effective tax rate (since we are on a graduated tax system) so the total tax paid could be lower than any of those caps. If your income is high enough that you are at the 20% cap gain limit you may also be hit with the NIT tax of 3.8% so review the return and all the worksheets carefully.
If you use the downloaded program you can do some "what if / test " returns ...
If you want to play around with different figures and tax scenarios without affecting your original return you can
In the TurboTax CD/Download software by creating a test copy:
- Open your return in TurboTax.
- From the File menu, choose Save As.
- Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name).
- Click Save. You are now safely working in the test copy and anything you do here will not affect the original.
In TurboTax Online, you'll have to create a test account separate from your regular TurboTax account and create a test return there. We recommend adding "test" or similar to your User ID so you can easily distinguish it from your actual account.
Or use the WHAT IF tool:
- Click Forms Icon (upper right of screen) or Ctrl 2 (forms view)
- Click on the Open Form Icon
- In the “Type a form name..” area type What-If (with the dash), click on the name of the worksheet - click on Open Form
- You will see the worksheet on the right side of the screen; enter the information right into the form
- To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1