How do I calculate capital gain when I sell a property?

How do I calculate capital gains when I sell a property?

Answer: First you should determine whether the property meets the IRS ownership and use test requirements because if it does you can exclude up to $250,000 if you are single and $500,000 if you are married from your taxes. More on that here.

If the property does not meet the requirements to be your primary residence, here is an example of how you would calculate your capital gain when you sell a property.

Let’s assume you are a single taxpayer who purchased a house for $100,000 and later you sell that property for $200,000 – you have a $100,000 capital gain. It’s important to note that this capital gains calculation is pretty basic and in most cases any significant repairs and improvements or expenses you made to the property are also included into your cost basis on the property, which would reduce your capital gain.