Question For Davet
back in july of last year you answered a question by someone asking about 5% or 15% capital gains tax. you said to refer to line 41 on your income tax return and that if your numbers were between $12000 and $46700 then you were in the 15% bracket and would be taxed at 5% for capital gains. my question is if the gain you make on the sale of your property is included when calculating these numbers. or if its just your regular income. with our normal income we fall into the 15% bracket but calculating our gain into it raises us up.
please help and thankyou
david patrick
This year it is line 40 of your 1040, and the married filing jointly 15% tax bracket tops out at $56800.
Yes, the amount on line 40 does include your capital gains.
thankyou davet, that clears up that problem. now if you don't mind i have one final question. i understand that depreciation is recaptured and taxed at 25%, but is it also included as income and if it is is the 25% taxed part income or the whole amount which in my case is about $13000. i hope thats not to confusing
thanks again
davidp
Your total capital gain is included in your Adjusted income on Line 40.
The portion of your capital gain that is due to depreciation is recaptured at 25% and the portion that is due to appreciation is taxed at 15%.