How to Calculate Short-Term & Long-Term Capital Gains
- 1). Figure out if you owned the capital good for more than 365 days. This information should be on sales records, which you should keep for at least 3 years after the sale in case the IRS audits you. Any good kept for 365 days or less realized a short-term capital gain; any good sold after 365 days of ownership realized a long-term capital gain.
- 2). Take the total sale amount and deduct the money you originally paid for the capital good.
- 3). Take the difference from Step 2 and subtract any sales fees, agent commissions and other transaction costs incurred while buying and selling the capital good. The resulting number is your capital gain.
