In 2023 I sold a long term rental property realizing substantial capital gains. I understand capital gains are treated differently than income. The law says I would pay no capital gains tax if my "income" is under $44,625. However, if I enter the capital gain on the 2023 sale of the rental where indicated in Turbotax, it produces as "income" my regular annual amount, which would be under $44000, PLUS the capital gain resulting in a very substantial capital gain tax burden.
For all practical purposes if that is correct, the sale of business assets will ALWAYS result in lower income people having a substantial capital gain obligation unless the sale produced a minimal profit or a loss. For lower income folks like me the $44000 dollar figure only rewards business failures and punishes the rare business success.
