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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Capital gains tax for an estate? Date: 7/9/2012 1:57 PM
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So, what you're saying is that I need to sit down with TurboTax and get an idea of my income limit for the year, then meet with a CPA to come up with an actual plan?

Because darned if I want to work hard to get my income up only to pay income taxes on the extra and capital gains tax on the house profit, leaving me with less money that if I had cut back on the work I accepted.


There's something wrong in your logic here. Even if you find yourself above the 15% limit, you will only pay 25% on the excess taxable income above the limit, not on all your income. Additionally, you will pay capital gains tax (0% or 15%) only on your share of the gain from the sale of the house, not on the amount of cash distributed to you.

While you might be able to pay less tax over the two years combined by altering the timing of your income, it is exceedingly rare to find a set of circumstances where you will end up with less money in your pocket because you have more income. This isn't one of them.

Ira
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