Question

capital gains tax bracket

Forum|Forum|5 years ago
February 22, 2021
1 reply
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I sold a piece of inherited land (not my primary home) and made a gain of $281,000. Not including this income of $281,000 our (MFJ) taxable income is less than $70,000. Does that mean that we are in the 0% capital gain bracket or do we have to include the 281,000 which would make our taxable income $351,000.00

Not A Product Question

it works a little differently

the first $80K of capital gains less ordinary income not to exceed $80K is taxed at $0 so in your case, $10K of capital gains is taxed at $0

the next $271K of capital gains is taxed at 15%

the $70K of ordinary income is taxed as if that was your only income (using tax tables for MFJ) about $8K

this is a very simplistic presentation. other items on your return could affect the tax calculation