Legal Question in Real Estate Law in Illinois
Hello, I have a question about capital gains on a real estate investment property.
I plan to sell this property in 2020 for an estimate net profit of 40k. I've owned the property since 2011. I understand the 0% gains bracket has a max personal income level of 80k...is that 80k the adjusted gross income / taxable income for the year? If so, this would motivate me to get below that level with additional 401k and traditional ira contributions.
Lastly, if I am able to get to the 0% gains bracket, would I still be liable for the depreciation recapture tax? Thank you for your time!
1 Answer from Attorneys
It would be inappropriate to respond to this kind of question without being the tax preparer and there's always a chance that the law could change by the time you would need to report the sale for income tax purposes, ie April of 2021. If you use any tax preparation software, however, like Turbo-Tax, choose the version with investment property modules and read the IRS Publications available on line.
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