About estimating after-tax proceeds from a potential investment sale

If you are considering selling an investment to raise money, remember to take capital gains taxes into consideration. The estimated amount you may owe from the sale affects how much you need to sell and how much you can spend or invest from the proceeds. The Capital Gains Estimator can help you project your capital gains taxes and your proceeds after deducting capital gains taxes.

For example, assume that you are considering selling some investments to make a $10,000 purchase. Selling $10,000 of an investment (plus enough to cover commissions) should allow you to make your purchase. However, you also need to set aside enough money to pay any capital gains tax. Depending on your situation, you may owe additional tax when you file your tax return the following year, or you may be required to make quarterly estimated tax payments.

After you use the Capital Gains Estimator to determine your capital gains taxes and net proceeds, you may decide to sell more of the investment and put aside an amount for capital gains tax. Or you may want to see what your tax and net proceeds would be if you sold a different investment, such as one with a higher cost basis and therefore a lower capital gains liability.