Home Page

Privacy Policy

Company Listings

Residential Listings
Under $160,000

Residential Listings
Over $160,000

Homes With Acreage
Under $250,000

Homes With Acreage
Over $250,000

Farms & Ranches

Commercial

Worth a Click!

Get to Know Bob

Area Info

Code of the West

Salida Weather — Live

Tips for Buyers & Sellers

Bob's Quick Tips for Buying and Selling Real Estate

Reasons You Need a Realtor

Questions to Ask Your Realtor

Selling Tips

Things to do When Selling

Low Cost Ways to Spruce-up Your Home

Remodeling and What You Should Know

Tips on Moving

Buyers' Tips

Reasons to Own your Own Home

Taking the Trauma out of Homebuying

How to Prepare for Home Ownership

Finances in Order?

Pros and Cons of Condos

Tips for First Time Buyers

Tips for Buying in a Tight Market

What Your Home Inspection Should Cover

Questions to Ask Your Home Inspector

What not to Overlook on your Final Walk-through

Common Closing Costs

What to Keep from Your Closing

What is Appraised Value?

Need a Loan?

About Your Credit

About Homeowners Insurance and Saving Money

What to know about Title Insurance

What to Watch for in a Purchase Contract

Understanding Capital Gains

Tips for Pricing Your Own Home

Jeep, Car and Van Rentals

How to Calculate Gain

In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:

• Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
• Add Adjustments:
  Cost of the purchase — including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
  Cost of sale — including inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
  Cost of improvements — including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
• The total of this is the adjusted cost basis of your home.
• Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

A Special Real Estate Exemption for Capital Gains Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.
• You have not sold or exchanged another home during the two years preceding the sale.

Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as job loss, divorce, or family medical emergency.