Why a decrease in federal due with sale of primary & rental property in same year?

Forum|Forum|1 year ago
August 31, 2024
1 reply
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Hello,

I am running mock tax scenarios to help prepare for our married-joint 2024 filings as we sold our primary residence this year (owned 10+ years) and will be paying LTC gains on the profit. We are also contemplating selling one of our long term rental properties this year and when I input projected sale ($200k) and profit ($100k) data, our "federal taxes due" amount drops by $10k.

My question is: how would our amount due decrease if there is a long term capital gain on the sale of the rental property?

Thank you TT Community.

NCPERSON1

@steve2649 suggest printing out Sch D and reviewing it before and after you add the proposed sale of the rental property. What do you have in passive losses?

Further, on the sale of the primary home, I am assuming your capital gains exceeds $500,000, otherwise there should be no tax.

steve2649Author

Thanks NCperson. Yes, we exceeded the $500k on our primary. I am looking at the original SchD and the one with the mock rental sale and there are no losses on either one- all gains.