my taxable income for 2015 was $63,061.37; and I sold some long term real estate for $125,000. do I have to pay a capital gains tax on that sale?
Terry Says: That depends on whether it is a personal residence, or an investment property. If it’s a personal residence that you own only in your name, the first $250,000 in gains (after material improvements in the property) is tax free. If it is an investment, then a lot depends on whether you have taken depreciation over the years (which must be “recaptured” at sale), or what improvements you have made in the property. I suggest you consult a tax professional to see what the appropriate tax position is for your situation.