| Mortgage Balance | $1,000,000 |
| Year Purchased | 2000 |
| Sales Price | $4,000,000 |
| Selling Expenses | $40,000 |
| Total Selling Expenses | $240,000 |
| Net Sales Proceeds | $3,760,000 |
| Cost Basis | $250000 |
| Cost of Improvements | $100000 |
| Depreciation | $133,636 |
| Net Adjusted Basis | $216,364 |
| Taxable Gain | $3,543,636 |
| Homeowner’s Exclusion | |
| Total Subject to Tax | $3,543,636 |
| Depreciation | Residential | Commercial |
| Cost Basis | $250000 | $250000 |
| Depreciable Amt (70%) | $175,000 | $175,000 |
| Annual Depreciation | $6,364 | $6,410 |
| Year of Purchase | $2000 | $2000 |
| Years Owned | 21 | 19 |
| Depreciation taken to date | $133,636 | $120,909 |
| Federal Tax Calculation | Value |
| Taxable Gain | $3,543,636 |
| Tax Rate 20% (0.20) | 0.2 |
| Federal Cap Gains Due | $708,727 |
| State Tax Calculation | Value |
| Net Sales Proceeds | $3,760,000 |
| Net Adjusted Basis | $216,364 |
| Taxable Gain | $3,543,636 |
| Homeowners Exclusion | |
| Taxable Gain | 3,543,636 |
| CA 13.3% | 0.133 |
| State Tax Due | $471,304 |
| Net Investment Income Tax | Value |
| Taxable Gain | $3,543,636 |
| 200,000 OR 250,000 | 200,000 |
| Taxable Amount | $3,343,636 |
| Tax Rate | 0.038 |
| Total | $127,058 |
| Debt over basis tax? | Value |
| Existing Mortgage minus Adj. Basis | $750,000 |
| Possible additional tax | $147,000 |
| Total Tax Bill | 1,460,771 |
| Projected Tax Bill | Value |
| Federal | $708,727 |
| State | $471,304 |
| NIIT | $127,058 |
| Depreciation Recapture 25% | $6,682 |
| Total Tax Bill | $1,313,771 |
| % of Profit to Taxes |