Capital gains on rental property (2013, income tax, sales, percentage)
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Unless I'm mistaken, income plays a part as to how much they will get taxed on capital gains and depreciation on sale of rental property. Varying degrees from zero income to 20K to 50K, etc
I plan to but just wanted to get some responses from this board first since they don't plan to sell yet.
My basic question. They purchased home for 75K. Sell at 100K. House is paid off. They will profit 100K but taxable income is sell price minus price when purchased. So net difference is $25K (we'll leave out all the other fees etc for simplicity sake)
Capital gains and payback of depreciation from rental property is based off of personal income.
But how far back does the IRS valuate that income. Is it from just the present year or do they go back a certain number of years to valuate income
In this scenario, would it be wiser to sell in 2016 (when they have $7000 income) vs in 2015 (when they have $24000 income)?
Thanks
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