Real Estate Math
A Maine seller is in the 22% federal income tax bracket and has a $150,000 long-term capital gain on their home sale (above the $250,000 exclusion). The capital gains tax rate on this gain is:
A22% (ordinary income rate)
B15% (long-term capital gains rate for this bracket)✓ Correct
C0%
D28%
Explanation
Long-term capital gains (assets held over 1 year) for taxpayers in the 22% ordinary income bracket are taxed at the preferential 15% long-term capital gains rate, not the ordinary income rate.
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