How to use the contract assignment tax calculator
Korea has an active resale market for apartment presale rights, where buyers trade the contract itself long before the building is finished. The United States has no equivalent system. The closest American transaction is an assignment of a pre-construction purchase contract, which some condominium developers permit and many expressly forbid, so check your contract before counting on it.
When an assignment is allowed, your profit is the assignment fee minus the deposits and upgrade payments you already made, minus commissions and legal costs. Hold the contract for a year or less and that profit is taxed at ordinary income rates. Hold it longer as an investment and long-term capital gain rates generally apply, though a pattern of flipping can make the IRS treat you as a dealer with ordinary income.
Do not assume a Section 1031 like-kind exchange will defer the gain. Since 2018 the provision applies only to real property held for productive use or investment, and an unclosed purchase contract is often a contract right rather than real property. Rates shown are a September 2026 reference and every rate field is editable.
This tool is for general reference only. Your actual tax depends on other income, state rules, dealer status and how the developer documents the assignment. Confirm with a CPA before signing.
Frequently asked questions
Usually not. Section 1031 now covers real property held for investment, and a purchase contract you never closed on is typically a contract right rather than real property. Ask a tax adviser before assuming deferral is available.
It depends on holding period and intent. Held more than a year as an investment, it is generally long-term capital gain. Held a year or less, or if you regularly flip contracts as a dealer, it is taxed at ordinary rates.
The 3.8% net investment income tax under Section 1411 can apply once modified adjusted gross income passes the statutory threshold. Set the field to 0 if your income stays below it.