Is Rental Capital Gain Tax 15 Percent or 40 Percent?

Is Rental Capital Gain Tax 15 Percent or 40 Percent?
by Bob BrussExcerpted from Inman News

If you own your rental property at least 365 days, you qualify for the federal long-term capital gain tax rate, which is a maximum of 15 percent.

However, a portion of your capital gain that is due to the depreciation you have deducted will be "recaptured" (that means taxed) at the special federal depreciation recapture tax rate of 25 percent (instead of 15 percent tax on the balance of your capital gain).

In addition, don't forget the state tax, unless the property is located in one of the lucky states without income tax. For full details, please consult your tax adviser.