CALCULATING CAPITAL GAIN | ||
"ANALYZE THE BENEFITS OF AN EXCHANGE 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 BASIS | Original Purchase Price | __________ |
+ Improvements | __________ | |
- Depreciation | __________ | |
= NET ADJUSTED BASIS | __________ | |
2. CALCULATE CAPITAL GAIN | Sales Price | __________ |
- Net Adjusted Basis | __________ | |
- Cost of Sale | __________ | |
= CAPITAL GAIN | __________ | |
3. CALCULATE CAPITAL GAIN TAX DUE | Recaptured 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-EXCHANGE | Capital Gain Taxes Due | _____0____ |
Gross Equity = Net Equity | __________ | |
| Gross Equity x 4 =
| __________
|
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