The gain will be calculated as
(selling price) MINUS (adjusted basis)
As that property was owned more than a year - the gain will be taxed as long term capital
gain - at reduced tax rates
- for most taxpayers - not more than 15%.
So if you sell for $300k - that woudl be your selling price.
You would need to determine the adjusted basis as discussed above - and add your selling expenses (Realtor's fees, inspections, closing costs, etc.)
Mortgage repayment woudl not affect calculations and your taxable income will not be reduced by that amount.
Regarding proving your costs...
First of all - you do need to keep your records for all expenses.
If you do not have such records - you might want to re-establish it - be reasonable.
In general - the IRS
doesn't require actual receipts for expenses below $75 - so your personal
records might sufficient.
Second - you do not need to send your supporting documents to the IRS - just keep for your records.
ONLY if audited - you would need to provide supporting documents.
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