Real Estate Capital Gains Tax Calculator 2016

Use this calculator to determine your 2016 real estate capital gains tax liability. The calculator accounts for the 2016 tax rates and the 25% long-term capital gains tax rate. You'll need to know your property's purchase price, sale price, and any associated costs.

How to Use This Calculator

To calculate your 2016 real estate capital gains tax:

Enter the purchase price of your property in the "Purchase Price" field.
Enter the sale price of your property in the "Sale Price" field.
Enter any associated costs in the "Associated Costs" field (e.g., closing costs, repairs, etc.).
Select whether the property was held for more than one year (long-term) or one year or less (short-term).
Click "Calculate" to see your estimated capital gains tax.

Note

This calculator provides an estimate. Actual tax liability may vary based on your specific circumstances and local tax laws.

How Capital Gains Tax Works

Capital gains tax is a tax on the profit you make when you sell an asset for more than you paid for it. For real estate, the tax rate depends on how long you held the property:

Long-term capital gains (held more than one year): Taxed at your ordinary income tax rate (up to 39.6% in 2016).
Short-term capital gains (held one year or less): Taxed at your ordinary income tax rate plus an additional 30% (up to 43.4% in 2016).

The formula for calculating capital gains is:

Formula

Capital Gain = Sale Price - Purchase Price - Associated Costs

Capital Gains Tax = Capital Gain × Tax Rate

In 2016, the long-term capital gains tax rate was 25% for most taxpayers. The short-term capital gains tax rate was 30% plus your ordinary income tax rate.

Worked Examples

Example 1: Long-Term Capital Gain

You bought a property for $200,000 in 2010 and sold it for $300,000 in 2016. Your associated costs were $5,000.

Calculation:

Capital Gain = $300,000 - $200,000 - $5,000 = $95,000
Capital Gains Tax = $95,000 × 25% = $23,750

Example 2: Short-Term Capital Gain

You bought a property for $150,000 in 2015 and sold it for $180,000 in 2016. Your associated costs were $3,000. Your ordinary income tax rate is 25%.

Calculation:

Capital Gain = $180,000 - $150,000 - $3,000 = $27,000
Capital Gains Tax = $27,000 × (25% + 30%) = $27,000 × 55% = $14,850

Frequently Asked Questions

What is the capital gains tax rate for real estate in 2016?: The long-term capital gains tax rate was 25% for most taxpayers. The short-term capital gains tax rate was 30% plus your ordinary income tax rate.
How do I report capital gains tax?: You'll need to report your capital gains on Schedule D (Form 1040) and pay the tax as part of your ordinary income tax liability.
Are there any exemptions for capital gains tax?: Yes, there are exemptions for certain types of property, such as primary residences and certain small business stock.
Can I deduct capital losses from my taxable income?: Yes, you can deduct capital losses up to the amount of your capital gains. Any remaining losses can be carried forward to future years.