Capital Gains

Forum|Forum|5 months ago
March 9, 2026
5 replies
63 views

If my adjustable and taxable income is zero dollars ($), and I sell my rental house and make $60,000, is the $60,000 capital gain taxable? I ask because I read articles that indicate that if the tax rate is $0 if, your taxable income is under a certain amount. Since my taxable income is $0, wouldn't I be excluded from paying income tax on capital gains?

Opus 17

Level 15

Yes, but

Income stacks for purposes of this calculation. If you are single, and take the standard deduction, roughly the first $45,000 of income is in the 10% or 12% bracket for regular income tax and the 0% bracket for capital gains. But if your total income is more than $45,000, that pushes the top income into the 22% income tax and 15% capital gains tax bracket. So if your only income is $60K of capital gains, the first $45K will be taxed at zero percent and $15K will be taxed at 15%.

These thresholds are obviously different for married filing jointly or head of household.

Mike9241

Level 15

does that $60k thake into account the reduced basis due to depreciation? if the property is in a state with personal income taxes or you live in a state with personal income taxes, the taxation will vary.

Mike9241

Opus 17

Level 15

@Mike9241 wrote:

does that $60k thake into account the reduced basis due to depreciation? if the property is in a state with personal income taxes or you live in a state with personal income taxes, the taxation will vary.

Good reminders.

1. Your gain is taxable. Your gain is the difference between the selling price and the adjusted basis. The adjusted basis is what you paid, minus depreciation. Your gain might have nothing to do with the amount of cash you get, such as if you have loans on the property. And the part of the gain that is due to depreciation is always taxed first as recapture, before moving into the calculation for normal capital gains. (But, if you have no other income and are single, you could have up to $15,000 of taxable recapture and still not pay any actual tax.)

2. Most states do not have a special rate for capital gains and you will probably pay the full rate on your state income tax.