Capital gains tax if unemployed

[Nat Serrano]

hi all, I've read a lot of capital gains but still I don't get answer.

I bought a house in 2016 for 200k, lived for a a few months, then moved and used it as rental property.

In 2022 I refinanced because of the low rates, got 150k cash out, owe 350k to the bank

In 2023 I received an offer to buy it for 450k, I was laid off so I only had 40k income in 2023 (so far) and we file married jointly, my wife doesn't have any income.

How much will I pay in capital gains taxes?

is the equity/cashout I got from the bank considered as capital gain and taxed? (150k)

is the capital gain considered income? so if I get 100k this year from the sell (450k-350k debt = 100k), will my total income in 2023 would be 140k? (40k income 2023 and 100k cash from the sell, minus commissions etc) or will the IRS consider only 40k (w2 income)

I know the 0% tax rate cap if married is 80k, so if capital gain is considered income then I won't sell because my income will surpass 80k, but if I don't have to pay capital gains because of being unemployed then I'll sell.

PS: I have another property that produces revenue but to my knowledge that is not considered taxable income for the capital gains (pardon for my non accountant lingo)

if needed I can pay for a quick consultation to clarify my question

thanks

Nat

[Matt Devincenzo]

There's more to this than my overly simplified answer, but this at least gets you in the ballpark. Your gain is sale price, minus sale costs, minus original purchase price. E.g. $450K - $35k (just a guess) -$200k leaves a gain of $215k. 

The $150k you received before was part of the $215k gain but you never paid taxes on it. Until you sell there isn't a taxable event and so no taxes are due.