So I sold a rental property that I had held for 5 years for approximately $44k profit, which would place this in the category of long term gains in the 0% bracket, meaning I should be paying no tax on the sale. However, when I input the sale into Turbotax, it increases my taxes due by approximately $6800. What gives?
As instructed on these forums, I'm going to the asset list in the Sale of Property/Depreciation section, clicking Edit by the property that I sold, indicating that I sold it, and putting in the date and price. I'm currently tearing through the forms trying to find out where things are going wrong, but if anyone can point me in the right direction, I would appreciate it.
Long Term Capital Gains are calculated not just by the amount of the gain, but also by the amount of Taxable Income on your return.
Here's more detailed info on How Capital Gains are Taxed.
Be sure you included the amount of your Sales Costs.
Original Cost - Depreciation Taken = Cost Basis
Total Proceeds - Cost Basis + Sales Costs = Gain