Capital Gains Tax Calculator

How to Use This Calculator

To use the Capital Gains Tax Calculator, you need to input the purchase price of the asset, the selling price, and the tax rate. The purchase price is the amount you paid for the asset, the selling price is the amount you sold it for, and the tax rate is the percentage of tax you pay on your gains. For example, if you bought a house for $200,000 and sold it for $300,000, with a tax rate of 20%, you would input these numbers into the calculator.

Let's say you bought 100 shares of stock for $50 each and sold them for $75 each, with a tax rate of 15%. You would input $5,000 as the purchase price, $7,500 as the selling price, and 15% as the tax rate.

The Formula Behind It

The formula for calculating capital gains tax is: Capital Gains Tax = (Selling Price - Purchase Price) * Tax Rate.

• Selling Price is the amount the asset was sold for
• Purchase Price is the amount the asset was bought for
• Tax Rate is the percentage of tax paid on the gain

Practical Examples

Here are three real-world scenarios:

• You buy a condo for $400,000 and sell it for $550,000, with a tax rate of 20%. The calculator would output $30,000 as the capital gains tax.
• You inherit a portfolio of stocks worth $100,000 and sell it for $120,000, with a tax rate of 12%. The calculator would output $2,400 as the capital gains tax.
• You buy a rental property for $700,000 and sell it for $900,000, with a tax rate of 25%. The calculator would output $50,000 as the capital gains tax.

Common Questions

What is capital gains tax?

Capital gains tax is a tax on the profit made from selling an asset, such as a house, stock, or bond.

How is capital gains tax calculated?

Capital gains tax is calculated by subtracting the purchase price from the selling price and multiplying the result by the tax rate.

Do I have to pay capital gains tax on gifts?

No, you do not have to pay capital gains tax on gifts, but the recipient may have to pay tax if they sell the asset.

Can I avoid paying capital gains tax?

You may be able to avoid paying capital gains tax by holding the asset for a certain period of time, such as one year, or by using tax-loss harvesting to offset gains with losses.

Are there any exemptions from capital gains tax?

Yes, there are exemptions from capital gains tax, such as the exemption on the sale of a primary residence, which can be up to $250,000 for single filers and $500,000 for joint filers.