Methodology

Methodology controls for this calculator

  • Official sources are listed with the date checked and what each source supports.
  • Federal scope, state/local exclusions, and assumptions are shown before any reader relies on an estimate.
  • Pages marked source-checked are not treated as expert-reviewed unless an external professional is named.
  • Material corrections update the page, date, and changelog instead of silently changing tax claims.

How this calculator works

The calculator compares sale proceeds to cost basis and classifies the holding period using the entered dates. It applies the user-entered tax rate only as a planning estimate.

Methodology checks

  • Inputs are processed in the browser and are not stored by Equity Tax Lab.
  • The result separates estimated withholding from final tax liability.
  • Official sources are listed below so readers can verify the rule family behind the estimate.

Example scenario

If shares are sold for $40,000 with a $25,000 basis, the estimated capital gain is $15,000. The holding period classification depends on the acquisition and sale dates.

Common mistakes

  • Using withholding as if it were final tax liability.
  • Ignoring state and local taxes when planning cash needs.
  • Forgetting that brokerage, payroll, and Form W-2 reporting can differ by transaction type.

When to stop and verify

  • The transaction crosses tax years, state lines, or employer payroll systems.
  • The result affects an 83(b) election, ISO exercise timing, estimated tax payment, or AMT exposure.
  • Your brokerage, Form W-2, Form 1099-B, or grant documents use terms that differ from the calculator inputs.

FAQ

Does this choose my capital gains rate?

No. Capital gains rates depend on taxable income, filing status, holding period, and other facts. The rate input is intentionally user-controlled.

What is cost basis for RSU shares?

RSU basis often starts with the amount included as ordinary income at vest, but brokerage reporting should be checked carefully.

Official sources

These links are used to verify the source family behind the page. They do not replace professional advice for personal facts.