Capital Gains and Depreciation Tax

Why does your capital gains calculator state a 15% fed tax rate, but
calculate at 12%? Am I missing something?
Carrie

Hi Carrie,
You asked about why the tax calculator on the 1031x.com website seemed to show a tax of 12% when it actually states that the tax rate is 15%. Good question!
The IRS takes your Capital Gain and taxes the recaptured depreciation portion at 25% and then taxes the REMAINDER at 15%. For example, if your gain were $90,000 and your depreciation were $20,000, your tax would be:
$20,000 * 25% = $5,000 plus
($90,000 - $20,000) * 15% = $10,500 plus
$90,000 * State Tax

I hope this helps. Thanks for the question (I am thinking of adding a note of explanation to the calculator!)
Sincerely,
Katie Zulanas
Director of Operations
1031x.com
1-888-899-1031