capitol gains formula-sale of rental property

[2Pat]

What is the name of your state?What is the name of your state? Arizona
I am considering selling my rental property condo. I purchased it in 1996 for $40,000 and have a firm offer of $100,000. While recently having my taxes done I asked the preparer how much of a percentage for capitol gains I would have to pay if I decide to sell. He said there were too many variables for him to figure out and said it could be as low as 6% and as high as 28%. Now I am confused. Is there a formula that I can use to try and figure out what I may have to pay?

 

[Snipes5]

Sure. Get your taxable income off the return. Add $60,000 to that. Go to the IRS website and determine your tax bracket including the money added in. Use the calculations, not the tax tables.

Multiply your taxable income by the tax bracket percentage, and multiply $60,000 times 20%, that is the bracket your capital gains will be in.

Add the two tax figures together, and there you go, a pretty good estimate.

Snipes

 

[2Pat]

Thank you for your reply Snipes

Still in AZ Unfortunately, after searching the (massive) IRS site, I am unable to figure out where I can find my tax bracket and I have not come across anything that allows me to use calculations (or find the tax tables.) My taxable income this year ended up figuring as 0 (which put me in the 10% bracket) and I understand I would need to add the $60,000 (which would obviously put me in a higher bracket.) After that point I get lost in the maze of information this site offers. Can you please help again? Thank you

 

[Snipes5]

20% of $60,000 is $12,000. 15% of $60,000 is $9000.

Your total tax, including tax on recapture of depreciation, will fall somewhere between those two numbers, based on the information you gave me.


Snipes