I have a question about capital gains.

[kelly1mm]

5. No, I mean the gain in value realized at sale. Without getting super technical, in the personal

home example the gain would be sales price after fees - cost basis of the home (purchase price + fees + improvements). for example say someone sold their home for $850,000. After sales fees they got 800k net. They bought the home in 2009 at the bottom of the market for 475k + 25k in fees and they spent 50k on a new inground pool.


the calculation would be sales price after fees (850k- 50k =800k) - cost basis (475k + 25k + 50K = 550k) = Total capital gain of $250k.

The calculation in a business property is more complex as you would have to account for adjusted cost basis after depreciation but the basic rules still apply (sales proceeds - cost basis = capital gain)