capital gain on primary residence

Forum|Forum|3 years ago
March 21, 2023
2 replies
16 views

After the $500,000 exclusion, my client has a long-term gain on the sale of their home greater than $400,000. I thought that the capital gain tax rate would be calculated based on all of their other income which is less than $80,000. Apparently I was wrong?

Individual

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Best answer by rbynaker

It works similar to regular income tax but with different rates and brackets. Follow the Sch D worksheet and you'll see the portion taxed at 0%, 15%, etc.

rbynakerAnswer

Level 13

It works similar to regular income tax but with different rates and brackets. Follow the Sch D worksheet and you'll see the portion taxed at 0%, 15%, etc.

J

jvarnercpaAuthor

Level 3

Thank you for answering so quickly. I can move on and give the client the bad news.

rbynaker

Level 13

You mean something like "Congratulations on the huge gain on your property! Out of the $900K profit you only have to pay ~$60K in federal income taxes."

BobKamman

Level 15

Are they also paying NIIT on Form 8960? I was researching that for sale of a second home -- somehow got the impression that the rule might be different for primary residence. But that might be just for the exclusion amount.

J

jvarnercpaAuthor

Level 3

Yes, they are.

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