Are contributions to a Sep Ira for freelancers based on 25% of gross income or 25% of net income?

It is based on net earnings minus one half of your self employment tax. 

https://www.irs.gov/retirement-plans/how-much-can-i-contribute-to-my-self-employed-sep-plan-if-i-participate-in-my-employers-simple-ira-plan

It shows you added the LIVE expert help feature for a higher cost.  Ask the expert.  How to connect to an expert in Turbo Tax Live

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Neither.  For a sole-proprietor it's 20% of net earnings.  Net earnings are net profit minus the deductible portion of self-employment taxes.

Thank you. Do capital gains play into the picture at all? In other words, if I have substantial capital gains, can a portion of those gains add to the amount I can contribute to a SEP?

No. The calculation depends only on your business income. 

Got it. Thank you again. One last thing- if I exceed the limit, what happens to the excess?

Unless corrected, excess SEP contributions are subject to a 10% excess-contribution penalty reported on Form 5330.  TurboTax does not support Form 5330.