topic I want to know tax implications of selling vacant land purchased over 8yrs ago that will make a profit of $30k in Deductions & credits

I want to know tax implications of selling vacant land purchased over 8yrs ago that will make a profit of $30k

rbrtconnelly — Sat, 01 Jun 2019 00:44:37 GMT

I am married. My annual income is under $40k and my wife's income is $90k. We have one dependent. The land was purchased by me solely during my previous marriage and I married my current wife last year

It depends. You will have a capital gain of $30K from th...

Zbucklyo — Sat, 01 Jun 2019 00:44:38 GMT

It depends. You will have a capital gain of $30K from the sale. The rate at which that capital gain will be taxed depends on your filing status. If you file jointly, you will owe capital gains tax at 15% of the gain. If you file separately, it is possible that your capital gains rate will be 0% (capital gains rate is 0% for taxable income under $37,650 if you file separately). However, there are other issues with filing separately that might make it better to file jointly regardless. For example, if you file jointly, and one of you itemizes deductions, the other one must itemize as well. The only way to figure out which strategy minimizes your overall tax bill is to create proforma tax returns both ways.

I highly suggest that you use the downloaded/CD program n...

Critter — Sat, 01 Jun 2019 00:44:40 GMT

I highly suggest that you use the downloaded/CD program next year so you can do several what-if scenarios if you wish to look at multiple ways to file.

@rbrtconnelly - My error here. I forgot that adding the...

Zbucklyo — Sat, 01 Jun 2019 00:44:42 GMT

@rbrtconnelly - My error here. I forgot that adding the capital gain to your base income if you file separately will push you into the 15% capital gains tax bracket even if you file separately. Therefore, there would be no advantage for filing separately in an attempt to avoid the gains tax.