Primary residences are taxed differently than second or investment homes.
Q. I am 62 and would like to sell our second home, which we bought in 2014, so we can realize some capital gain to cover retirement expenses. Are we looking at a long-term capital gain tax rate? Our only income is $60,000 a year from my 401 and $24,000 a year between the two of us from Social Security.
the transaction is fully taxable, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.long term capital gains rate. Currently, without the second home sale, your income is $80,400 which is made up of $60,000 from your 401 and 85% of your Social Security. After deducting the 2021 standard deduction of $25,100 your federal taxable income is $55,300 which results in a tax of $6,241.
You didn’t mention how much the potential gain would be on the sale of your second home, so Kiely offered the following:A gain of $100,000 would yield a tax of $11,175, or 11.18%.A $200,000 gain would see tax of $ 26,175, or 13.09%, while a $250,000 gain would have a tax of $33,675, or 13.47%.on investment income kicks in,” he said. “This surtax on $200,000 gain would be $1,155 and at $250,000 it would be $3,055. The above taxes are on top of your current federal tax of $6,241.
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