More than 1 year (Long Term)
1 year or less (Short Term)
Lived in for 2 of last 5 years?
Excludes up to $250k (Single) or $500k (Married) of gain.
Estimated Tax Breakdown
Gross Profit:$0
Adjusted Cost Basis:$0
Total Capital Gain (Before Exclusion):$0
Taxable Capital Gain:$0
Effective Tax Rate:0%
Estimated Capital Gains Tax:$0
Net Profit After Tax:$0
function calculateCapitalGains() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById("cg_purchase_price").value) || 0;
var salePrice = parseFloat(document.getElementById("cg_sale_price").value) || 0;
var improvements = parseFloat(document.getElementById("cg_improvements").value) || 0;
var sellingCosts = parseFloat(document.getElementById("cg_selling_costs").value) || 0;
var income = parseFloat(document.getElementById("cg_income").value) || 0;
var filingStatus = document.getElementById("cg_filing_status").value;
var holdTime = document.getElementById("cg_hold_time").value;
var isPrimary = document.getElementById("cg_primary_residence").checked;
// 2. Base Calculations
var adjustedBasis = purchasePrice + improvements;
var netProceeds = salePrice – sellingCosts;
var grossProfit = salePrice – purchasePrice;
var totalGain = netProceeds – adjustedBasis;
// 3. Handle Primary Residence Exclusion
var exclusionAmount = 0;
if (isPrimary) {
if (filingStatus === "married") {
exclusionAmount = 500000;
} else {
exclusionAmount = 250000;
}
}
var taxableGain = totalGain – exclusionAmount;
if (taxableGain < 0) taxableGain = 0;
if (totalGain 609350) taxRate = 0.37;
else if (income > 243725) taxRate = 0.35;
else if (income > 191950) taxRate = 0.32;
else if (income > 100525) taxRate = 0.24;
else if (income > 47150) taxRate = 0.22;
else if (income > 11600) taxRate = 0.12;
else taxRate = 0.10;
} else if (filingStatus === "married") {
if (income > 731200) taxRate = 0.37;
else if (income > 487450) taxRate = 0.35;
else if (income > 383900) taxRate = 0.32;
else if (income > 201050) taxRate = 0.24;
else if (income > 94300) taxRate = 0.22;
else if (income > 23200) taxRate = 0.12;
else taxRate = 0.10;
} else { // Head of Household
if (income > 609350) taxRate = 0.37;
else if (income > 243700) taxRate = 0.35;
else if (income > 191950) taxRate = 0.32;
else if (income > 100500) taxRate = 0.24;
else if (income > 63100) taxRate = 0.22;
else if (income > 16550) taxRate = 0.12;
else taxRate = 0.10;
}
} else {
// Long Term Capital Gains Rates (2024 Thresholds)
// 0%, 15%, 20%
if (filingStatus === "single") {
if (income > 518900) taxRate = 0.20;
else if (income > 47025) taxRate = 0.15;
else taxRate = 0.00;
} else if (filingStatus === "married") {
if (income > 583750) taxRate = 0.20;
else if (income > 94050) taxRate = 0.15;
else taxRate = 0.00;
} else { // Head of Household
if (income > 551350) taxRate = 0.20;
else if (income > 63000) taxRate = 0.15;
else taxRate = 0.00;
}
}
// NIIT Calculation (3.8% surcharge on investment income if MAGI exceeds threshold)
// Thresholds: Single 200k, Married 250k, HoH 200k
var niitThreshold = (filingStatus === "married") ? 250000 : 200000;
// Simplification: Assuming the Capital Gain is part of the MAGI causing the excess
if (income + taxableGain > niitThreshold) {
niitRate = 0.038;
}
// 5. Final Calculation
// Note: NIIT usually applies to the lesser of the gain or the amount over threshold.
// For this calculator, we apply a simplified "Effective Rate" approach for estimation.
var baseTax = taxableGain * taxRate;
var niitTax = 0;
if (niitRate > 0) {
// Calculate amount over threshold
var amountOver = (income + taxableGain) – niitThreshold;
// NIIT applies to lesser of: Net Investment Income (Taxable Gain) OR Amount Over Threshold
var subjectToNiit = Math.min(taxableGain, amountOver);
niitTax = subjectToNiit * niitRate;
}
estimatedTax = baseTax + niitTax;
var netProfit = totalGain – estimatedTax;
var effectiveRate = (taxableGain > 0) ? (estimatedTax / taxableGain) * 100 : 0;
// Formatting helper
function formatCurrency(num) {
return "$" + num.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
}
// 6. Display Results
document.getElementById("cg_res_gross").innerHTML = formatCurrency(grossProfit);
document.getElementById("cg_res_basis").innerHTML = formatCurrency(adjustedBasis);
document.getElementById("cg_res_total_gain").innerHTML = formatCurrency(totalGain);
document.getElementById("cg_res_taxable_gain").innerHTML = formatCurrency(taxableGain);
document.getElementById("cg_res_rate").innerHTML = effectiveRate.toFixed(1) + "%";
document.getElementById("cg_res_tax").innerHTML = formatCurrency(estimatedTax);
document.getElementById("cg_res_net").innerHTML = formatCurrency(netProceeds – adjustedBasis – estimatedTax);
document.getElementById("cg_result_area").style.display = "block";
}
Understanding Real Estate Capital Gains Tax
Calculating the potential tax liability when selling a property is crucial for investors and homeowners alike. The "capital gain" is essentially the profit you make from the sale of a real estate asset. However, the IRS does not tax you on the gross revenue; they tax you on the net gain after specific deductions and adjustments.
How to Calculate Cost Basis
Your tax liability is determined by the difference between your net selling price and your "Adjusted Cost Basis." The basis isn't just what you bought the house for. It includes:
Purchase Price: The original amount paid for the property.
Capital Improvements: Money spent on permanent upgrades (e.g., a new roof, adding a room, renovating a kitchen). Note that repairs (like fixing a leaky faucet) generally do not count.
The duration you hold the property significantly impacts your tax rate:
Short-Term (Held 1 year or less): These gains are taxed as ordinary income. This means the profit is added to your salary and wages, potentially pushing you into a much higher tax bracket (up to 37%).
Long-Term (Held more than 1 year): These gains enjoy preferential tax rates of 0%, 15%, or 20%, depending on your total taxable income and filing status.
The Primary Residence Exclusion
One of the most powerful tax breaks in real estate is the Section 121 exclusion. If you have owned and lived in the home as your primary residence for at least two of the five years immediately preceding the sale, you can exclude up to:
$250,000 of gain if you are a single filer.
$500,000 of gain if you are married filing jointly.
This calculator automatically applies this exclusion if you check the "Primary Residence" box.
Net Investment Income Tax (NIIT)
High-income earners may be subject to an additional 3.8% tax known as the Net Investment Income Tax. This applies if your Modified Adjusted Gross Income (MAGI) exceeds $200,000 for single filers or $250,000 for married couples filing jointly. This calculator estimates this surcharge based on the income you provide.