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2022 Long Term Capital Gain Rates

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Tax is applicable on Long Term Capital Gains (LTCG) if your income (NOT INCLUDING LTCG NOR DIVIDENDS) exceeds
 
                                  Single                                $41,675
                                  Head of Household           $55,800
                                  Married Filing Joint            $83,350
 
So, amounts below those have no long term capital gains.
 
The LTCG rates are 0%, 15%, or 20%.  And then another 3.8% might apply depending on income.(It is called Net Investment Income).
 
Also, it is somewhat deceiving. 
 
Adjusted Gross Income includes LTCG and could cause a portion of social security to be taxed.  Also, some states tax LTCG as ordinary.
 
 

RECOVERY REBATE CREDIT & Social Sec Card Wording

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RECOVERY REBATE CREDIT ELIGIBILITY

You are not eligible for the Recovery Rebate Credit claimed on a 2020 tax return if any of the following applies:

  • You may be claimed as a dependent on another taxpayer's 2020 return (for example, a child or student who may be claimed on a parent's return or a dependent parent who may be claimed on an adult child's return).
  • You do not have a Social Security number that is valid for employment issued before the due date of your 2020 tax return (including extensions). Some exceptions apply for those who file married filing jointly where only one spouse must have a valid Social Security number to claim the credit.
  • You are a nonresident alien.                 
  • You are an estate or trust.

Including Extensions

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In reading code (if you ever try to read it you will know why it is called CODE) and regulations (U.S. Treasury Dept interpretation of the Code--this is what we think it means) you will find the term INCLUDING EXTENSIONS.

 

This means INCLUDING A TIMELY FILED EXTENSION.

Sale Primary Residence BUT NOT TWO YEARS in Last Five

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Reduced Maximum Exclusion Code Sec. 121(c)(2) provides for a reduced maximum exclusion for a taxpayer who sells or exchanges his or her principal residence but fails to meet the use-and-ownership requirements or the two-year limitation.

 

In order for a taxpayer to claim a reduced maximum

I.R.C. § 121 (c) (2) (B) — such sale or exchange is by reason of a change in place of employment, health, or, to the extent provided in regulations, unforeseen circumstances. I.R.C. § 121 (d) Special Rules

It works like this….

You lived in it one year of the last 5 from date of sale…… so, you met one half of the requirement to exempt the gain. A single person has the full exclusion of $250k. You only have an exclusion of $125k.

We calculate the gain to be $70k. The only issue you have is depreciation recapture. If you took $20k of depreciation, you have to recapture it (taxable).

So, of the $70k gain, $20k is recaptured and the difference of $50k is exempt.

2022 Vehicle Mileage Rates

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For 2022, the standard mileage rates for cars, vans, pickups or panel trucks) is

  • 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021,
  • 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and
  • 14 cents per mile for charitable organizations (unchanged from 2021).

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

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