I sold my rental property for approximately $100,000 more than my cost basis. Why is this not calculating at the 15% capital gains rate?

[PatriciaV]

It depends on your holding period and your overall tax rate.

First, capital gains treatment for the sale of Rental Property requires that you owned the property for more than one year.  

Also, the capital gains tax rate usually depends on your income. The maximum net capital gain tax rate is 20 percent for those taxpayers in the highest tax bracket (39.6%). However, for most taxpayers a zero or 15 percent rate will apply. If you have income over $250,000, an additional 3.8% is added for net investment tax.

You can review the calculation of your capital gains tax on Schedule D Tax Worksheet, a TurboTax worksheet that is included in your complete tax return (see instructions here: How do I print a copy of my TurboTax Online return before filing?). If the results are not what you expect, return to the interview where you reported the same and review your entries.

Additional Information

• IRS Capital Gains and Losses – 10 Helpful Facts to Know
• IRS Tax Topic 409 - Capital Gains and Losses
• IRS Net Investment Income Tax
• What is the marginal tax rate?