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1031 Exchanges - Calculating Capital Gain

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Services for Real Estate Pros with Asset Preservation

CALCULATING CAPITAL GAIN

"ANALYZE THE BENEFITS OF AN EXCHANGE
BEFORE YOUR SELL"

This is a highly simplified way of figuring capital gain and capital gain tax liability. In 2007-2008 there have been changes that make calculating capital gain more complex. The model below is a simplified form for getting a ballpark figure on capital gain and the tax liability. The taxpayer's accountant/CPA is critical in determining the ACTUAL tax liability.

   
1. CALCULATE NET ADJUSTED BASISOriginal Purchase Price__________
+ Improvements __________
- Depreciation__________
= NET ADJUSTED BASIS__________
   
2. CALCULATE CAPITAL GAINSales Price__________
- Net Adjusted Basis__________
- Cost of Sale__________
= CAPITAL GAIN __________
   
3. CALCULATE CAPITAL GAIN TAX DUERecaptured Depreciation (25% )__________
+ Federal Capital Gain (15%)__________
+ State Tax (when applicable)__________
= TOTAL TAX DUE__________
   
4. ANALYZE PURCHASE-NO  
    EXCHANGE
Sales Price__________
- Cost of Sale__________
- Loan Balances__________
= GROSS EQUITY__________
- Capital Gain Taxes Due__________
= NET EQUITY__________
   
Net Equity X 4 =__________
   
5. ANALYZE PURCHASE-EXCHANGECapital Gain Taxes Due_____0____
Gross Equity = Net Equity__________

 

 

Capital Gain Tax Calculator

Gross Equity x 4 =

 

__________