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homesteader
New Member

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

Will we owe on the entire 91,378 or just the portion that would be over the 153,100 amount for married filing jointly or qualified widow(er)?  We would be below the 153,100, so I figured we didn't owe any capital gains tax.

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Accepted Solutions
TaxGuyBill
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

The long-term capital gain tax is based on the amount over $75,900 (the start of the 25% tax bracket), not $153,100 (the start of the 28% tax bracket).

It is also based on "taxable income", which is after your exemptions and Standard Deduction/Itemized deductions.  So if you have AGI of $124,378 (including the gain from the sale) and use the Standard Deduction and 2 exemptions, that brings your taxable income down to $103,578.

So that leaves you with $27,678 that is subject to the 15% long-term capital gain tax, which equals $4152 of tax.


However, that 'extra' income could affect other things on your tax return, effectively increasing the amount of tax.  Also, don't forget State taxes.  If it was ever rented out or used as a Home Office, the depreciation will also be factored in (usually taxed at 25%).

You also said that is your "profit".  Some people misunderstand how that works.  Your mortgage has nothing to do with it, but only the purchase price, cost of improvements, depreciation, and selling price (including selling expenses) fater into the "Gain" of the sale.

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14 Replies
TaxGuyBill
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

The long-term capital gain tax is based on the amount over $75,900 (the start of the 25% tax bracket), not $153,100 (the start of the 28% tax bracket).

It is also based on "taxable income", which is after your exemptions and Standard Deduction/Itemized deductions.  So if you have AGI of $124,378 (including the gain from the sale) and use the Standard Deduction and 2 exemptions, that brings your taxable income down to $103,578.

So that leaves you with $27,678 that is subject to the 15% long-term capital gain tax, which equals $4152 of tax.


However, that 'extra' income could affect other things on your tax return, effectively increasing the amount of tax.  Also, don't forget State taxes.  If it was ever rented out or used as a Home Office, the depreciation will also be factored in (usually taxed at 25%).

You also said that is your "profit".  Some people misunderstand how that works.  Your mortgage has nothing to do with it, but only the purchase price, cost of improvements, depreciation, and selling price (including selling expenses) fater into the "Gain" of the sale.

View solution in original post

homesteader
New Member

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

I guess that will cause all our social security to be taxed.
TaxGuyBill
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

Yep, that will do it.
homesteader
New Member

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

I forgot our social security which was about 33,000 last year and we paid tax on about 5000 of it.  Will we have to pay taxes on the entire 33,000 this year and how much would that add to the total owed to the IRS?
Zbucklyo
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

You never pay taxes on more than 85% of your social security income.  So, 85% * 33,000  implies about $28,000 more in taxable income, plus more of the capital gain would be taxed.
homesteader
New Member

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

One more question, please.  Does that mean I will be going from the 15% tax bracket to the 25 % and then pay capital gains also?  That means I am being taxed 10% more of my total income plus 15% more for capital gains.
Zbucklyo
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

It is unclear exactly what your income sources are other than social security income and the capital gain from the sale of the second house.  In any case, marginal tax brackets do not work that way.  Only amounts above the tax bracket thresholds are taxed at the marginal rate.
TomYoung
Level 13

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

As long as your total taxable income - LTCG included - keeps you in the bottom two tax brackets any LTCG will be taxed at the 0% tax rate.  But if the LTCG is sufficient to break you into the the 25% tax bracket that "excess" amount of LTCG will be taxed at the 15% rate.
girlslovejeeps
Level 1

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

Wait, isn't it true that you DO NOT have to report the sale of your home because you made less than $250,000 profit?
girlslovejeeps
Level 1

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

Wait, isn't it true that you DO NOT have to report the sale of your home because you made less than $250,000 profit?
TaxGuyBill
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

@girlslovejeeps   The original question is for a "second home", which needs to be reported.

You do not need to report the sale *IF* (1) you sell your MAIN home, AND (2) you qualify for the 2-out-of-5-year exclusion, AND (3) your gain is less than the $250,000/$500,000 amount, AND (4) you did not take any depreciation on the home (such as from renting it or a Home Office), AND (5) you did not receive a 1099-S reporting the sale.
girlslovejeeps
Level 1

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

According to TurboTax, and other sites, you do not need to report the sale of a second home (as long as it's not a rental, & meets the 2 year rule, & 250K/500K rule). The original poster didn't specify if this second home was in fact a rental. As far as a 1099S, we received one at closing and TurboTax still says we don't have to report. IMO, neither does the original poster (if it wasn't a rental)?
TaxGuyBill
Level 9

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

I'm not sure what you are reading that, but that is incorrect.

Only your MAIN Home qualifies for the $250,000/$500,000 exclusion.  Second homes do not qualify, and therefore it must be reported if there is a gain, and the gain is subject to income tax.
girlslovejeeps
Level 1

Adjusted gross income of 33,000, made a clear profit selling a second house of 91,378. What is my capital gains tax?

Ah ok, I must've misread about 2cd home.
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