How is Capital Gains Calculated?

This capital gains tax calculator will give you a preliminary estimate of your total state and federal tax liability without regard for any capital loss or passive loss carryovers that you may have available as offsets, or for the the effects of the alternative minimum tax on any other capital gains you would realize.

The default values below illustrate the potential gains and their associated taxes, fill in your own values to get your customized estimate.

THIS CALCULATOR PROVIDES AN APPROXIMATE ESTIMATE. Please consult your Tax Advisor for an accurate calculation based upon your specific situation

Capital Gain Calculation
Original Price of Property (cost basis)	$
Improvements to Property	$
Selling Expenses	$
Sale Price of Property	$
Total Calculation of the difference between the sales price of the relinquished property less selling expenses and less the adjusted basis of the relinquished property. Capital Gain	$

Accumulated The gradual reduction in value of an asset over time. The IRS requires investors to depreciate real estate (and certain other assets) over a specified period of time. Residential real estate uses a 27.5 year schedule, and commercial real estate uses a 39 year schedule. Depreciation Use the Depreciation Calculator	$

Tax Calculation
Federal Calculation of the difference between the sales price of the relinquished property less selling expenses and less the adjusted basis of the relinquished property. Capital Gain s Tax*	%	$
The gradual reduction in value of an asset over time. The IRS requires investors to depreciate real estate (and certain other assets) over a specified period of time. Residential real estate uses a 27.5 year schedule, and commercial real estate uses a 39 year schedule. Depreciation Recapture	%	$
State Tax**	%	$
Net Investment Income Tax***	%	$
Total Tax Liability		$

RESULTS

1031 Exchange
Sale Price of Property		$
Selling Expenses	MINUS	$
Federal The amount received for a property, minus the property’s adjusted basis and transaction costs. Regardless of the adjusted basis of a property, there is no gain until the property is transferred. There are two types of gain: “realized gain” and “recognized gain.” Realized gain is the difference between the total consideration (cash and anything else of value) received for a piece of property and the adjusted basis. Realized gain is not taxable until it is recognized. Gain is usually, but not always, recognized in the year in which it is realized. If gain is not recognized in the year it is realized, it is said to be deferred. In an exchange under Section 1031, realized gain is recognized in part or in full to the extent that boot is received. See Boot. Where only like kind property is received, no gain is recognized at the time of the exchange. Gain s Tax	MINUS	$
The gradual reduction in value of an asset over time. The IRS requires investors to depreciate real estate (and certain other assets) over a specified period of time. Residential real estate uses a 27.5 year schedule, and commercial real estate uses a 39 year schedule. Depreciation Recapture	MINUS	$
State Calculation of the difference between the sales price of the relinquished property less selling expenses and less the adjusted basis of the relinquished property. Capital Gain s	MINUS	$
Net Investment Income Tax	MINUS	$
Total to Reinvest in a new property		$

Sell Property without a 1031 Exchange
Sale Price of Property		$
Selling Expenses	MINUS	$
Federal The amount received for a property, minus the property’s adjusted basis and transaction costs. Regardless of the adjusted basis of a property, there is no gain until the property is transferred. There are two types of gain: “realized gain” and “recognized gain.” Realized gain is the difference between the total consideration (cash and anything else of value) received for a piece of property and the adjusted basis. Realized gain is not taxable until it is recognized. Gain is usually, but not always, recognized in the year in which it is realized. If gain is not recognized in the year it is realized, it is said to be deferred. In an exchange under Section 1031, realized gain is recognized in part or in full to the extent that boot is received. See Boot. Where only like kind property is received, no gain is recognized at the time of the exchange. Gain s Tax	MINUS	$
The gradual reduction in value of an asset over time. The IRS requires investors to depreciate real estate (and certain other assets) over a specified period of time. Residential real estate uses a 27.5 year schedule, and commercial real estate uses a 39 year schedule. Depreciation Recapture	MINUS	$
State Calculation of the difference between the sales price of the relinquished property less selling expenses and less the adjusted basis of the relinquished property. Capital Gain s	MINUS	$
Net Investment Income Tax	MINUS	$
Total to Reinvest in a new property		$

Benefit of Exchanging vs. Selling

of additional equity available to reinvest through a 1031 exchange

*Federal Calculation of the difference between the sales price of the relinquished property less selling expenses and less the adjusted basis of the relinquished property. Capital Gain s Tax is between 15-20% depending upon annual household income.

** StateTax varies by state and income level, 5% is just an estimate used as the default above.

*** Net Investment Income Tax of 3.8% is applied if annual investment income is $200,000+ for a single taxpayer or $250,000+ for married taxpayers filing jointly.

How is Capital Gains Calculated?

Capital Gain Calculation

Tax Calculation

RESULTS

1031 Exchange

Sell Property without a 1031 Exchange

Benefit of Exchanging vs. Selling