Please forward this error screen to 207. What Is the Capital Gains Tax Rate on the Sale of a Home? What Will Happen to My Taxes If I Sell a Rental House? In capital investment includes the purchase of terms, capital gains on investment real estate is the difference between the sales price and the cost of purchase and improvements.
Capital gains are taxed at either a short-term rate, which is 25 percent for investments held under one year, or a long-term or reduced rate, which is 15 percent for investments held one year or longer. Capital gains as a formula is your sales price minus sales costs, original purchase price and the cost of capital improvements, plus depreciation you have previously claimed on the property. Section 1031 of the IRS code allows you to sell investment property and use the profits to buy a like-kind property without paying any federal taxes. Capital gains and capital gains rates are also applicable to other investments such as stocks.