Capital Gains Tax Calculator & Real Estate 1031 Exchange


Capital Gains Tax Calculator

This capital gains calculator estimates the tax impact of selling your investment property. It will also help you estimate the financial value of deferring those taxable gains through a 1031 like-kind exchange instead of a taxable sale.

It is important to realize that tax law changes and personal situations vary so use this calculator as an estimate only and verify all numbers with a competent professional before making any decisions.

Original purchase price ($):
Capital improvements ($):
Accumulated depreciation ($):
Sales price:
Deductible closing costs ($):
Federal capital gains rate (%):
State capital gains rate (%):
Mortgage loan balances at sale ($):
Net adjusted basis:
Capital gain:
Depreciation recapture (25%):
Federal capital gains tax:
State capital gains tax:
Total taxes due:
Gross equity:
After-tax equity:
Sale reinvestment (after-tax equity X 4):
Exchange reinvestment (gross equity X 4):

The Basics Of Capital Gains Tax

Capitals Gains Tax usually applies when you sell a capital asset more than it’s purchase price. May it be stocks, bonds, gold, a house or other form of investments. Capital Gains Tax is calculated from the profit you earned from selling your assets based on the country’s tax laws. If you are thinking of selling your assets, the capital gains tax calculator will help you estimate how much capital gains tax you need to pay for your profit as a result of the disposal of your asset.

What are Capital Assets

Stocks, bonds, mutual fund investments, real estate properties, gold, coins, fine arts and other collectibles forms part of a capital asset. It is basically the assets that you own that is used for personal or investment purposes is a capital asset. The profit you earn for disposing these properties are subject to capital gains tax when it is sold. But the income generated for these properties such as rent, dividends, interest or royalties are subject to a normal income tax.

Short Term Vs. Long Term Capital Gains

Long or short capital gains are determined based on the holding period of the property before you sell it. If you hold your property more than one year, it is already considered a long-term capital gain or loss. On the other hand, if the property was held less than a year, it is a short-term capital.

A long-term capital gain has a reduced tax rate compared to assets disposed before it turns a year old. The long-term capital gains tax rate is calculated at 15% in 2012. If your normal tax rate is less than 15%, you would likely qualify for a zero percent long-term capital gains tax rate. The short-term capital gains will form as part of your income for the year; thus, it will be taxed like a normal income. The tax rate for short-term capital assets ranges from 10% to 39%. There are certain conditions where a gain from disposal of capital asset is exempt from taxes. Check with your financial advisor if you could qualify for this exemption.

Tax Rates For Collectible Items

Collectible assets held for a longer period of time are taxed at a flat rate of 28%. Gains on sale of other collectible assets that has less than one-year holding period will form part of your normal income. The collectible assets are as follows:

  • Gold, silver and other precious metals of gems
  • Paintings and other fine arts
  • Stamps
  • Old Coins
  • Rare rugs
  • Antiques
  • Alcoholic Beverages

Capital Loss Carried Forward

A capital loss happens when you dispose a capital asset at a value lower than the purchase price. A capital loss is deducted from your capital gains and the capital gains tax will be calculated on the net capital value. If the capital loss exceeds the capital gains for the year, the difference will be applied in the succeeding year as if the loss incurred was incurred in the next year.

Keep A Record

Capital assets are taxed differently when disposed. Therefore, it is very important that you keep a record of your capital assets since this is important when calculating the capital gains or loss. It is very important that you keep a record of the history of your capital assets and the relevant transactions while holding the asset to help reduce your taxes when it is sold. Record keeping is highly recommended especially if you intend to hold your capital assets for a longer period of time. The following are the records that are essential in calculating capital gains tax are as follows:

  • Purchase Price
  • Improvement Capital Expenditures
  • Insurance, brokerage and taxes paid
  • Commissions paid to your broker and accountant
  • Details of interest for the money owed relating to the capital asset
  • Maintenance cost, repairs, etc.

Capital Gains Tax Calculator Terms And Definitions

  • Purchase Price – The amount paid for acquiring a property
  • Sale Price – The value received for disposing a property
  • Holding period – The number of months or years that you possess your property
  • Depreciation – The reduced value of a property due to wear and tear
  • Capital Gain – The amount earned due to an increased value of an asset after disposal
  • Capital Loss – The difference of selling a property at a price lower than the purchase price

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