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hopeshelper
New Member

Are my capital gains going to be taxed at 15% or 25%? And is that tax able to be deducted with the purchase of an Electric Vehicle or not?

I sold my rental property and have a $76,000 capital gain (even though I actually used that money to pay back my parents for the down payment on my current home). I was wondering if the tax I owe on capital gains is deductible with the Electric Vehicle purchase (tax deduction). The Pacifica Hybrid qualifies for a $7,500 deduction, but I don't want to buy it if it will not HELP reduce my taxes. Thank you!
1 Reply
ReyJG
New Member

Are my capital gains going to be taxed at 15% or 25%? And is that tax able to be deducted with the purchase of an Electric Vehicle or not?

Each tax credit that you qualify is handled on separate parts/forms of your tax return and often are limited by the amount of your total actual federal income tax liability.  So if you qualify for any these credits, they are used to reduce that tax liability.  The sale of your rental condo will result in capital gains but the final capital gains tax rate is determined by your total gross income.  For 2017 if your total gross income (including the gain on sale of your condo) is $191,650 or less, your federal capital gains tax rate will be 15% (and possibly another 10% on the state adjusted gross income for some states that have a corresponding capital gain tax).  If your vehicle is on the list of the qualifying vehicles for that tax credit, than the $7,500 can be used to offset your total tax liability (which includes the 15% capital gains tax on your sale of the condo).  If your capital gains tax is 15% (assuming your income is less than $191,650), then your tax on the sale is $11,400 -- so the electric vehicle credit will reduce your overall tax liability by $7,500.  Depending on your state of residence, you cannot forget the potential tax liability on capital gains.
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