maybe - not enough facts
if there real estate you sold your personal residence? did you live there 2 of the last 5 years? if yes to both questions, then there is no capital gains tax
if the real estate you sold was investment property, then you add the capital gains to the 'taxable income" (which I suspect you mean was your W-2 income), so you are way above $78K ; there is also recapture tax from the depreciation.
so hard to give you a definitive answer on such limited information.
Q. Do I have to pay capital gains tax if my taxable income is less than $78,000?
A. Yes. For a single person, the 0% long term capital gains rate ends at $41,775 taxable income. Your other income (not the capitl gains) is allocated to the first $41,775 of taxable income.
It was an investment property. How is the depreciation tax calculated? And can the loan interest be added as expense to be deducted from the proceeds to determine the capital gains tax I owe?
Nased on what I read, I think this threshold you mentioned are for 2019. 2022 uses $78K as the ceiling.
@John-AG --
Be aware that the 2022 capital gain tax brackets are based on your total taxable income including the capital gain.
It was an investment property. How is the depreciation tax calculated?
Am I to assume this was residential rental real estate? If so, you should have been depreciating the property the entire time it was classified as a rental. The program (not you) takes care of the depreciation for you.
And can the loan interest be added as expense to be deducted from the proceeds to determine the capital gains tax I owe?
Mortgage interest on rental property is a SCH E expense. You "should" have been claiming that every year, assuming the property was acquired with a mortgage. It's not treated any differently in the year you sell the property.
If you report the sale in the SCH E section of the program, then the program (not you) will take care of the depreciation recapture for you. Recaptured depreciation is added to your AGI, and is taxed anywhere from 0% to a maximum of 25%.
@John-AG wrote:
Nased on what I read, I think this threshold you mentioned are for 2019. 2022 uses $78K as the ceiling.
No. If you are single, any income that would normally be in the 10% or 12% regular income tax bracket would have a zero percent long term capital gains rate. If your regular income places you in the 22% tax bracket, then your long term capital gains are taxed at 15%. The top of the 12% bracket for 2022 is $41,675, then you can add your itemized deductions or your standard deduction of $12,950. So if your gross income is more than $54,625, your long term capital gains will be taxed at 15%.
@John-AG wrote:
It was an investment property. How is the depreciation tax calculated? And can the loan interest be added as expense to be deducted from the proceeds to determine the capital gains tax I owe?
If the investment property is income-producing (schedule E), then you deduct the loan interest against rental income.
If the property is not income producing, there are two options for taking some tax advantage from the interest you paid to buy the property, but they are not part of the capital gains equation. Investment interest is handled differently and you would have to file amended tax returns for previous years to get any benefit. We can discuss that further if you want more information.
Land is never depreciated. Building on land are depreciated if they are placed in service to produce income. So again, if this was income producing property, your depreciation was or should have been calculated on schedule E. The part of your capital gains that is due to recapture of depreciation is taxed as ordinary income up to 25%; in your case, if your income is less than $78,000, then your recapture will be taxed at 10%, 12% or 22% depending on what your income actually is. Then the rest of the gain is taxed as long term capital gains at 15%.
If this was land, or if you bought land with buildings but never placed them in service, then you don't have depreciation to recapture.