With this Capital gains calculator is an attempt to simplify the estimation of tax you may have to pay on any capital gains that arise when you sell or transfer a capital asset. What is a capital asset? In layman’s language, every asset that you own for personal or investment purposes is a capital asset like your home, land or household furnishings, shares, stocks or bonds.
These capital assets are classified basically into two types- short term capital asset and long term capital asset. How do you know? Just count the number of days of holding of those assets before you sold it. So if you held the assets for less than 12 months, the capital asset is short term, and its sale will generate short term capital gains.If the capital asset is held for twelve months or more, such an asset is long term capital asset and selling such an asset will give rise to long term capital gains.The calculator eill help you to easily determine capital gains tax on real estate investment property.
Different Tax rates for short & long term capital gains!
Short term capital gains are taxed at the same tax rate that is applied to your normal income. In other words, if you are falling in 28% tax bracket, and you sold stocks after holding say ten months, the gain will be short term capital gains ( as holding was less than 12 months) and will be taxed @ 28%.
Long term capital gains are taxed on special prescribed rates . Which is given below :
Long-Term Capital Gains Bracket
|Tax rates||Single Taxpayers||Married Filing Jointly||Head of Household||Married Filing Separately|
|0%||Up to $38,600||Up to $51,700||Up to $38,600||Up to $77,200|
|20%||Over $425,800||Over $479,000||Over $452,400||Over $239,500|
2019, Capital Gains Brackets
For Unmarried Individuals, Capital Gains Over
For Married Individuals Filing Joint Returns, Capital Gains Over
For Heads of Households, Capital Gains Over
Short Term or Long Term Capital Gains Calculator
Forknowing more on capital gains , please refer IRS Publication 544, Sales and Other Dispositions of Assets;
So before you think how to avoid capital gains tax when selling real estate, calculate it using above tool!