To determine the capital gain on the sale of the condo, you will need to determine the cost basis of the property. This depends upon how you acquired the condo. I appreciate that you note that it was deeded to you, but was it gifted to you? Was it inherited by you? Did you purchase it? Did you acquire it some other way?
How you came to own the condo dictates how you determine the cost basis of it, which is a necessary part of computing any gain on the sale of the condo. For example, it you inherited the condo, your cost basis is the fair market value of the property on the date of the decedent’s death, though an alternate valuation date may be used if elected by the estate.
If you acquired the condo as a gift, determining the cost basis can become a bit complicated, but is generally the donor’s adjusted cost basis at the time of the gift (unless the fair market value was less than the donor’s basis at the time of the gift). Further, if the donor paid gift tax in connection with gifting you the condo, that amount may increase your cost basis.
The starting point for calculating any capital gain is your cost basis, which may then be adjusted. Any capital improvements may become relevant to your adjusted cost basis, but only those capital improvements that you made to the condo during your period of ownership.
I hope this necessarily general answer is helpful. As you can see, the outcome depends upon how you acquired the property that was “deeded” to you.
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