Tax rate on 2nd home sale

willoregon — Wed, 25 Feb 2026 05:34:14 GMT

We sold a 2nd home in 2025, make less than $600,050 married filing jointly, including the proceeds from the sale, so I expected and planned on paying 15% tax on the gain, but the program is computing a 20% tax on the gain. Just want to make sure the program is calculating it correctly? I am sure it is but why 20% when from what I read it should be 15%? Thank you!

Re: Tax rate on 2nd home sale

Vanessa A — Wed, 25 Feb 2026 14:27:41 GMT

The $600,050 applies to all of your income. So if your total taxable income with the sale of the home was greater than $600,050, then the amount above that would be taxed at the 20% rate instead of the 15% rate. The 20% rate only applies to the amount above $600,050. Below that it would be taxed at 15% and 0% according to the brackets.

If your MAGI is over $250,000, but your taxable income is below $600,050, then it is possible that you are seeing an effective tax rate on this of 18.8% instead of 20% due to the Net Investment Income tax of 3.8%. This is based on your Modified Adjusted Gross Income.

Was this home ever a rental? If so, then you may also be seeing a tax on the recapture of depreciation which is 25% for real estate.

Look at your Schedule D worksheet, Capital Gains and Qualified Dividends worksheet to see for sure how you are being taxed and the rates that are being applied.

topic Tax rate on 2nd home sale in Investors & landlords

Tax rate on 2nd home sale

Re: Tax rate on 2nd home sale