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Posted by Will on January 21, 2008, 6:27 am
Please log in for more thread options > DORFMONT@aol.com (Linda Dorfmont) wrote:
>
>> I have been doing a number of distressed disposition analyses for
>> taxpayers who are upside down on their mortgages. I recently met with
>> a family who has several rental properties in this situation. I
>> mentioned to them that this year and for the next 3 years the capital
>> gains rate goes to zero for people in the 10 - 15% bracket, and for
>> those above it is 5%.
>>
>> They spoke with their regular accountant and their attorney. Neither
>> of these people had heard of the change to the capital gains rate. I
>> heard about it several years ago when it was first passed but forgot
>> until reminded at a seminar last week.
>>
>> Could somebody give me the law and year it was passed that made this
>> change?
>
> I don't understand how the two are related. If they are upside-down on the
> mortgages, how do they still have a capital gain? Did they just keep
> pulling money out?
>
> The new rates do not include a 5% rate as you suggest above.
> If your tax rate is 10 or 15%, you have a 0% cap gain rate. 25% or higher
> bracket still see a 15% rate.
So if an elderly couple is living with income at the poverty line but has a
$2M one-time capital gain on sale of their primary residence, they can take
the entire $2M free of Federal capital gains? Or is there a cap on the
amount that will qualify for the 0% rate?
--
Will
> The law was JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003 (JGTRRA)
> of course. A link to the details is
> http://www.cffp.edu/portal/alias__Rainbow/lang__en-US/tabID__3406/Default.aspx
>
> Some amateurs out there will guess it was part of the Pension Protection
> Act of 2006, which contained a myriad of other changes to the tax code.
> Their accountant needs to read more.
>
> JOE
>
> --
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--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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