Purchase price + cost to buy + improvements (your sweat equity isn't allowed) + cost to sell = cost basis
Selling price - cost basis = taxable profit or non deductible loss
You may be eligible for a partial exclusion on any gains from the sale of the home if you owned and lived in the home for less than two years.
Go to IRS Publication 523 Selling Your Home on page 6 - https://www.irs.gov/pub/irs-pdf/p523.pdf#page=6
