@francster for purposes of gain/loss computation, the mortgage pay-off amount is NEVER used.
Your Gain is Sales Proceeds LESS Basis in the property.
Sales Proceeds = Sales Price LESS allowable Sales Expenses ( generally things like title insurance costs, Sales commission, transfer Tax , sales preparation costs like repairs, paining etc. done only for the purpose of selling.
Basis = Acquistion Price/ Cost + Cost of any improvements over the holding period
The above is assuming that the property was never used a income property ( i.e. depreciable property ).
Does this make sense ?
