Capital Gains Tax Calculator - Do It Yourself!

Stay In Control - Know Your Tax!

July 31, 2004
Bogdan Voicu

Searching the Internet, you may find a Capital Gains Tax Calculator that will help you calculate the capital gains tax you are required to pay when selling an asset or an investment.

Though they are generally easy to use, the Capital Gains Tax Calculators will always need some data to be introduced by a human. So, it would be good for you to understand that actual process.

First of all, you need to know the income tax bracket that applies to you. This is done using the annual income. There are six brackets and chances are that you are above the second one.

Next, you need to establish the period of time that you held the asset. If it is longer than a year, then you will have to take in account a 5% capital gains tax for the first 2 income tax brackets and 15% for the rest.

This being said, all you need is to compute the result.

Still, before taking the money to the IRS, don't forget about the exclusion to the capital gains tax. As an example, you have an exclusion of $250,000 at the selling of a house if it was the primary residence for at least 2 years in the past 5. A married couple has even more: $500,000.

Anyway, though this analysis will probably help you understand a lot more; you should still require help from professionals, just to be sure. Maybe they can give you a better analysis for your particular case. Most important of all, they can provide you with a better knowledge of a particular state's laws and with all the exclusion possible to apply for you.