CAPITAL GAINS ON SALE OF SECOND HOME

[TAYARBS]

Why does Turbo Tax show I owe Long Term Capital Gains Tax on the sale of a second home, when under IRS guidelines I fall in the Less than $78,750 AGI and below the 15% Tax Rate?

[Lisa995]

How much other income do you have besides the LT cap gains?

[HelenC12]

If at any point in time your second home was a rental, a portion of your gain may be taxed at a maximum tax rate of 25% for depreciation recapture (unrecaptured section 1250 gain from selling section 1250 real property). 

• For additional information about depreciation recapture please see IRS Publication 544 Chapter 3, page 27.

[TomD8]

When you look at that $75,780 figure remember that, for purposes of determining your LT capital gain tax bracket, your LT capital gain itself is added to your ordinary income.