Hal_Al
Level 15

Investors & landlords

There are four things going on with your tax return.

1. The 0% capital gains (CG) rate only applies to the portion of you capital gains, included in taxable income below the 22% tax bracket (~$40K). At best that would only be ~$28,000 taxed at 0%, Since you have other income, it's going to be much less than that,

2. The CG income increases your AGI making more of your Social security taxable.

3. The increase in total taxable income, making more of the SS taxable, also decreases the amount of CG taxed at 0%.

4. The depreciation recapture is taxed as ordinary income, not at long term CG rates.