754 269 7048How Much Tax Will I Pay When I Sell ?
How Much Tax Will I Pay When I Sell My Property
When you sell a property, there is a chance you will have to pay Capital Gains Tax. Capital Gains Tax is the tax you pay on the increase in value you’ve incurred on the property. There are 2 types of Capital Gains Tax we will discuss:
Short-Term Capital Gains – This is when you buy and sell a property in less than one year. This type of capital gains is taxed at a higher tax rate.
Long-Term Capital Gains – This is when you buy and sell a property in more than one year. This type of capital gains is taxed at a lower tax rate.
Short Term Capital Gains
If a property is owned by an individual, or an LLC with individual owners, Short Term Capital Gains will be the same as your normal income tax rate. Later we will show you the tax breaks you get when the investment is long term capital gains. Remember, Short Term Capital Gains is when you buy and sell your property in less Than One Year.
| Marginal Tax Rate | Taxable Income | Income Tax is equal to: |
|---|---|---|
| 10% | $0-$9,520 | 10% of the income tax |
| 12% | $9,951 – $40,5250 | $995 plus the 12% over the exess of $9,950 |
| 22% | $40,526 – $86,375 | $4,664 plus 22% over the exess of $40,525 |
| 24% | $86,376 – $164,925 | $14,751 plus 24% over the exess of $86,375 |
| 32% | $164,926- $209,425 | $33,603 plus 32% over the exess of $164,925 |
| 35% | $209,426 – $523,600 | $47,843 plus 35% over the exess of $209,425 |
| 37% | Over $523,601 | $157,804.25 plus 37%over the exess of $523,600 |
Long Term Capital Gains
If your investment was owned for more than 1 year, then Long Term Capital Gains will apply. This is generally lower than Short Term Capital Gains. Long Term Capital Gains also gives you a 0% tax bracket up to $38,600. Again, this bracket below is for investors that own a property under their individual names, or an LLC owned by individual members.
| TAX BRACKET/RATE | Individual or Foreigner |
|---|---|
| 0% | $0 – $40,400 |
| 15% | $40,401 – $445,850 |
| 20% | Over $445,851 |
