2017 IRS long term capital gains tax rate

[Sarah Jukes]

In 2017 my husband and I sold our home that we’d owned 4 yrs. AND my mum’s only home which has my name on it too, just because she felt it best to do so. (We bought a diff house and live together)At that time we didn’t realize I’d then have to pay long term capital gains tax. And only mentioned my house in our tax returns.Now the IRS sent me a letter...regarding my mum’s house. however my married joint filed taxes 2017 has net income of $20,000. 

The total gain on the sale of my mums house was $70,000. Is that then divided between me and my mum. So my gain would be $35,000. What would the tax rate then be on this? My joint net income of only $20,000. In 2018 it would be 0% would it still be that in 2017? I know it changed in ‘18.

My CPA is researching this..makes me want to do my own research..!

Many thanks!

[Ashish Acharya]

Originally posted by @Sarah Jukes:

In 2017 my husband and I sold our home that we’d owned 4 yrs. AND my mum’s only home which has my name on it too, just because she felt it best to do so. (We bought a diff house and live together)At that time we didn’t realize I’d then have to pay long term capital gains tax. And only mentioned my house in our tax returns.Now the IRS sent me a letter...regarding my mum’s house. however my married joint filed taxes 2017 has net income of $20,000. 

The total gain on the sale of my mums house was $70,000. Is that then divided between me and my mum. So my gain would be $35,000. What would the tax rate then be on this? My joint net income of only $20,000. In 2018 it would be 0% would it still be that in 2017? I know it changed in ‘18.

My CPA is researching this..makes me want to do my own research..!

Many thanks!

 Ignoring the sale of your house of 4 years( assuming you qualified for full exclusion), your portion of the cap gain for 2017 is still taxed at 0%. 

Very simple cal: 

Your taxable income would be: 

20000 - let's say wage

35000- Cap gain 

(12700) - Standard Deduction 

(8100) - exemptions

34200 = Taxable income

If you put that in the Qualified Dividends and Captial gain worksheet, your tax is still 0.

[Sarah Jukes]

thanks for this!! I am feeling more hopeful. we actually have 3 children so our exemptions are even more thankfully. it was on honest mistake, we didn't realize having my name on my mum's house, and then selling all needed to be on the tax return. we came here from england where it's a totally different system!