When the taxable gain or loss resulting from the sale of an asset is calculated, its cost basis is used rather than its actual purchase price.
The amount of federal capital gains tax will depend on the Exchanger’s tax bracket.
When the taxable gain or loss resulting from the sale of an asset is calculated, its cost basis is used rather than its actual purchase price. The cost basis is an adjustment of the purchase price that takes into account factors such as fees paid (brokerage fees, certain legal fees, sales fees), taxes paid (including sales tax, excise taxes, real estate taxes, etc.) and depreciation.
In addition to federal capital gains tax, there may also be a state capital gains tax, which varies by state.
* These states either allow a taxpayer to deduct their federal taxes from state taxable income, have local income taxes, or have special tax treatment of capital gains income.
Source: Tax Foundation, Commerce Clearing House
