Can I get $40k excl on LT capital gains for 2022 for add'l ins proceeds for a rental house destroyed if in 2021 I took the $40k exemption when I rec'd the 1st ins. check?

Forum|Forum|3 years ago
April 4, 2023
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Individual tax return, in 2021 rec'd insurance check for $158K and in 2022 rec'd $24k. Fire totally destroyed the house, will not be replacing it.

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DavidD66

Can you clarify, what $40,000 exclusion/exemption are you referring to?

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truman10Author

By exclusion I'm referring to the 1st $40k of LT capital gains is taxed at 0% tax rate.

DavidD66

The first $40,000 of Long Term Capital Gains is not necessarily taxed a rate of 0%. For 2022, if your filing status is single, and your taxable income is $41,675, or less, there is a 0% capital gains tax rate. However, if your taxable is $41,676 to $459,750, your Long Term Capital Gains are taxed at 15%. That applies to all of your long term capital gains, not the long term capital gains in excess of $41,676. So, whether you will be taxed on some or all of your capital gains, depends upon your total taxable income.

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