Home Sale Proceeds Calculator
How much will you walk away with when you sell your house? Subtract commissions, closing costs, credits and your mortgage payoff, check the $250,000/$500,000 home sale tax exclusion, and see what is left after paying off other debts.
How to use the home sale proceeds calculator
Enter the price you expect, your selling costs, and what you still owe on the house. For the tax part, enter what you paid plus the cost of improvements, whether you meet the home sale exclusion's 2-of-5-year tests, and your capital gains rate. The calculator shows the cash you walk away with, the gain, how much of it is tax-free, and, if you plan to use the money to pay off other debts, what is left after that.
Commissions are negotiable and vary by market and by agreement, so enter the rate in your listing agreement. Other closing costs depend heavily on your state's transfer taxes and title fees; ask your title or escrow company for a seller net sheet to compare.
A worked example
Hypothetical: a married couple sells for $400,000, with 5% in commissions, 1.5% in other closing costs and $2,000 in repair credits. They owe $220,000 on the mortgage, paid $250,000 for the house including improvements, and have lived in it for years.
| Amount | |
|---|---|
| Sale price | $400,000 |
| Selling costs | -$28,000 |
| Mortgage payoff | -$220,000 |
| Tax on the gain ($122,000 gain, all excluded) | $0 |
| Cash at closing | $152,000 |
| After paying off $30,000 of other debts | $122,000 |
The home sale tax exclusion
Under the IRS rules for selling your main home, you can exclude up to $250,000 of gain from income, or $500,000 if you file jointly with your spouse, when:
- you owned the home for at least 24 months of the 5 years before the sale, and
- you lived in it as your main home for at least 24 months of those 5 years (the two periods do not have to be the same), and
- you did not exclude gain from selling another home in the 2 years before this sale.
For the $500,000 amount, either spouse can meet the ownership test but both must meet the use test. Gain from depreciation you claimed for renting or a home office cannot be excluded. Some people who sell early because of a job move, health or other unforeseen events qualify for a partial exclusion; see IRS Publication 523. Gain above the exclusion is taxed at long-term capital gains rates if you owned the home more than a year: see capital gains tax rates.
Selling to pay off debt
Selling a house to clear debts can work when there is a lot of equity and the next home or rent costs clearly less. It works badly when selling costs eat most of the equity, or when the debts come back because the spending behind them did not change. Before you list, compare the cash this calculator shows with a payoff plan using the snowball or avalanche method, and check what you could afford next with the home affordability calculator.
Frequently Asked Questions
How much will I make selling my house?
Start with the sale price and subtract agent commissions, your other closing costs, any repairs or credits to the buyer, and the payoff on your mortgage and any home equity loan. In our example, a $400,000 sale with $220,000 still owed leaves about $152,000. Capital gains tax comes off only if your gain is above the exclusion.
Do I pay tax when I sell my house?
Usually not on a main home. If you owned it and lived in it for at least 2 of the 5 years before the sale, you can exclude up to $250,000 of gain, or $500,000 on a joint return, and you cannot have used the exclusion on another home in the previous 2 years. Gain above that is taxed as a capital gain.
How is the gain on a home sale calculated?
Gain is the amount realized (sale price minus selling expenses such as commissions) minus your adjusted basis (what you paid plus improvements, minus any depreciation you claimed for renting or a home office). IRS Publication 523 has worksheets.
What is a seller net sheet?
An estimate of what the seller receives at closing after commissions, closing costs, credits and loan payoffs. Agents and title companies prepare one; this calculator gives you the same kind of estimate before you talk to them.
Should I sell my house to pay off debt?
Only if the numbers and your housing plan both work: after paying off the mortgage and selling costs, will the cash clear the debts, and will your next home cost less than this one? Selling costs often take several percent of the price, so selling to clear a small debt rarely pays. Compare a payoff plan first.
