1. What is the Proceeds Calculation?

The proceeds calculation determines how much money you'll actually receive after selling a rental property, accounting for your outstanding mortgage balance, closing costs, and any applicable taxes.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( Sale\ Price \) — The amount the property is sold for
• \( Mortgage\ Balance \) — Remaining balance on your mortgage
• \( Closing\ Costs \) — Fees associated with the sale
• \( Taxes \) — Any taxes owed on the sale

Explanation: This calculation shows your net profit after paying off all obligations related to the property sale.

3. Importance of Proceeds Calculation

Details: Understanding your net proceeds helps in financial planning, determining if selling is the right decision, and preparing for tax implications.

4. Using the Calculator

Tips: Enter all amounts in USD. Be sure to include all closing costs and estimated taxes for an accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What's included in closing costs?
A: Typically includes realtor commissions, title insurance, transfer taxes, attorney fees, and other administrative costs.

Q2: What taxes might I owe?
A: May include capital gains tax, depreciation recapture tax, and state/local transfer taxes.

Q3: Can proceeds be negative?
A: Yes, if your obligations exceed the sale price, you'll need to bring money to closing.

Q4: How accurate is this estimate?
A: This provides a basic estimate. Consult a real estate professional for precise figures.

Q5: Should I consider other factors?
A: Yes, also consider market conditions, opportunity costs, and your long-term financial goals.