It doesn't appear that you will have any capital gain. Here's why: broker fees and closing costs generally add up to 8-10% of the sale price of the home. But let's assume that you only pay 5% - that would be $31,250. So your sales price - closing cost would be $625,000 - $31,250 = $593,750. Your basis is $601k +$5k of improvements = $606k. So you have a loss, which is not deductible (unfortunately). But no capital gains.
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