0% Captial Gain tax rate

8 replies
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My client is on a fixed income of less than 40k annually. She sold her house last year for a big gain above the primary residency exemption. Does she qualify for the 0% tax rate on long-term capital gain?

ProSeries Professional

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T

TaxGuyBillAnswer

@Clipperclerk wrote:

My client is on a fixed income of less than 40k annually.

If she started off with $40,000 of income, and adds in a large amount of additional income from the sale, that puts her income much higher. So if she had a $200,000 of taxable gain from the sale, her income is now $240,000. That means much of the capital gains would be taxed at 15%.

IRonMaN

Level 15

What happens when you load it into the software?

Slava Ukraini!

C

ClipperclerkAuthor

Level 3

It calculates a capital gains tax at the15% rate.

sjrcpa

Level 15

But probably not all of it is taxed at 15%.

Look at the Schedule D Tax Computation worksheet. It is most likely correct.

The more I know the more I don’t know.

Just-Lisa-Now-

Intuit Community Champion

If shes on Social Security, dont forget to remind her that her Medicare Premiums will go up for 2023 due to this increase in income.

https://www.medicareresources.org/medicare-eligibility-and-enrollment/what-is-the-income-related-monthly-adjusted-amount-irmaa/

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

TaxGuyBillAnswer

@Clipperclerk wrote:

My client is on a fixed income of less than 40k annually.

If she started off with $40,000 of income, and adds in a large amount of additional income from the sale, that puts her income much higher. So if she had a $200,000 of taxable gain from the sale, her income is now $240,000. That means much of the capital gains would be taxed at 15%.

C

ClipperclerkAuthor

Level 3

Thank You all! Makes Sense

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