If I sell a piece of property, which I paid $6,500 for in 1968, for $350,000, what will be my capital gains tax? My tax bracket last year was 6%
There is no 6% bracket, at least not at the federal level, so I'm confused. Federal income tax rates start at 10% of ordinary income and 5% for long-term capital gains.
Even if you start at 5% for capital gains, most of your gain would be subject to the 15% rate. The 5% rate applies only to income that would otherwise fall in the 10% and 15% brackets if it were ordinary income. For singles, the 15% bracket stops at $29,050 of taxable income; on joint returns, it stops at $58,100.
So, assuming your basis in the property is the $6,500 you paid (it could be more if you made capital improvements or less if you ever depreciated it) and you have no expenses on the sale (expenses would be subtracted from the sales price to figure proceeds of the sale), your long-term gain would be $343,500.
Assuming it's all taxed at 15% (because you have enough other income to plow through the 10% and 15% brackets), your tax bill would be $51,525.
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