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Posted by DJ Redlocks on September 7, 2008, 6:18 pm
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> "DJ Redlocks" wrote:
>
>> It is my understanding that for people whose income is in the
>> two lowest tax brackets capital gains taxes are reduced to zero
>> for 2008-2010. Can someone explain this to me?
>>
>> Supposing a person with a low income sells an investment
>> property for a large profit. Would the large profit (around
>> $500,000) be exempt from capital gains taxes if their
>> regular income puts them in one of the lower brackets?
>
> No. The amount that it takes to get the person to the top of the 15%
> bracket (see the Tax Rate Schedules) is not taxed. The balance is taxed
> at 15%. Note that this large of a cap gain would likely result in some
> AMT, in which case it wouldn't come out exactly as stated.
>>
>> Also, assuming that the gain is exempt from federal capital
>> gains taxes, would any capital gains tax be due to the state of
>> Maryland).
>
> There's no similar provision in MD law, so you'd pay state/county tax on
> the entire gain.
>
> --
> Phil Marti
> Clarksburg, MD
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