My parents sold their primary residence and had a taxable gain of 1,000,000 on the sale (that's after the 500,000 exclusion). Their annual income before the gain is 82000 which I thought put them in the 15% bracket for long term capital gains (owing $150,000) but Turbo Tax calculates that they owe 20% ($200,000). Please explain why they are being taxed at 20% and not 15%.
Despite the fact that your parents' income before the gain is $82,000, their gain on the sale of the residence ($1 million) is added to that $82,000 to arrive at their AGI (adjusted gross income). As a result, that increases their capital gains tax rate (i.e., the capital gain counts toward their AGI for tax purposes).
Our experts are available on-demand, no appointment needed. Get help all year long with TurboTax Expert Assist.
Explore your optionsEnter your E-mail address. We'll send you an e-mail with instructions to reset your password.
©1997-2026 Intuit, Inc. All rights reserved.
Intuit, QuickBooks, QB, TurboTax, Credit Karma, and Mailchimp are registered trademarks of Intuit Inc. Terms and conditions, features, support, pricing, and service options subject to change without notice.
Security Certification of the TurboTax Online application has been performed by C-Level Security.
By accessing and using this page you agree to the Terms of Use.
© 2026 Intuit Canada ULC or its affiliated companies. All rights reserved. Intuit, QuickBooks, QB, TurboTax and ProFile are registered trademarks of Intuit Inc. Terms and conditions, features, support, pricing, and service options subject to change without notice.
Copyright © Intuit Canada ULC, 2026. All rights reserved.
© 2026, Entreprises Intuit Canada ULC ou ses sociétés affiliées. Tous droits réservés. Intuit, QuickBooks, QB, TurboImpôt et ProFile sont des marques déposées d’Intuit Inc. Les modalités, prix, fonctions et options de service et de soutien peuvent changer sans préavis.
© 2026, Entreprises Intuit Canada ULC. Tous droits réservés.
