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If i sell my rental property for $133k and paid $42k in 2017, what is included into the capital gains tax. I have a yearly income of about $35k?

I know the depreciation taken will be taxed but with having a lower tax bracket, will i be taxed on the gain?  Can I also included improvements done to the property in the past?
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3 Replies

If i sell my rental property for $133k and paid $42k in 2017, what is included into the capital gains tax. I have a yearly income of about $35k?

The cost of improvements is added to your cost basis. This is one of many income tax calculators available online. 

https://www.aarp.org/money/taxes/1040_tax_calculator.html

 

Carl
Level 15

If i sell my rental property for $133k and paid $42k in 2017, what is included into the capital gains tax. I have a yearly income of about $35k?

Can I also included improvements done to the property in the past?

Property improvements to rental property are added in the tax year they are placed "in service", and depreciation starts on that state. Property improvements done before the property was placed in service, are just added to the initial cost basis you entered in the first year the property became a rental.

 

If i sell my rental property for $133k and paid $42k in 2017, what is included into the capital gains tax. I have a yearly income of about $35k?


@Kellyfoster35 wrote:
but with having a lower tax bracket, will i be taxed on the gain? 

 

If you had $35,000 of income without the sale, plus over $90,000 with the sale, your income is over $125,000.  So yes, most likely at least part of that will be taxable because you are not in a "lower tax bracket" anymore.

 

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