When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale.
The same holds true in home sales, but there are other considerations.
How to Calculate Gain
|Your home’s original sales price when you bought it (not what you brought to closing).|
|Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage).||+|
|Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items).||+|
|Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale).||+|
|Add the above items to get your adjusted cost basis:||=|
|The final sale amount for your home.|
|The adjusted cost basis figure from above.||–|
|Your capital gain:||=|
Download the Capital Gaines Worksheet