Printable cheat sheet

    Texas profit, loss, equity, appreciation, and depreciation cheat sheet

    Built for Texas sales agent exam prep. Name the concept first because equity, appreciation, cash after sale, and profit after costs are different answers.

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    EquityValue - loan

    Equity ignores buying costs, improvements, and selling costs unless the stem asks for net cash.

    Value changeCurrent value - purchase price

    This is the raw appreciation or depreciation amount.

    Appreciation %Value change / purchase price

    Use the original purchase price as the denominator unless the stem says otherwise.

    Cash after saleSale price - payoff - selling costs

    This is cash flow from sale, not total profit.

    Adjusted basisPurchase + allowed costs + improvements

    Use simplified exam-style basis only when the stem tells you which costs to include.

    Profit after costsSale price - adjusted basis - selling costs

    This can be lower than appreciation or equity when costs are part of the question.

    The exam setup rule

    1. Name the final ask before touching the numbers.
    2. Use current value minus loan only for equity.
    3. Use purchase price as the denominator for appreciation percent.
    4. Subtract payoff and selling costs only when the question asks for sale cash or net result.
    5. Add only the costs and improvements the stem tells you to include in exam-style profit math.

    Five worked examples

    Equity$420,000 value, $286,000 loan balance

    $420,000 - $286,000 = $134,000 equity.

    Appreciation amount$350,000 purchase, $420,000 current value

    $420,000 - $350,000 = $70,000 appreciation.

    Appreciation percent$70,000 value gain on $350,000 purchase price

    $70,000 / $350,000 = 0.20 = 20%.

    Cash after sale$420,000 sale, $286,000 payoff, $26,000 selling costs

    $420,000 - $286,000 - $26,000 = $108,000 cash after sale.

    Profit after costs$350,000 purchase, $4,500 buying costs, $18,000 improvements, $26,000 selling costs

    Basis is $372,500. $420,000 - $372,500 - $26,000 = $21,500 profit after costs.

    Traps to check

    1. Do not subtract improvements when the question asks only for equity.
    2. Do not confuse appreciation with cash after sale.
    3. Do not use current value as the appreciation denominator unless the stem says so.
    4. Do not annualize a value change unless the final ask says annual rate.
    5. Do not assume appreciation means profit after all costs.
    6. Do not treat simplified exam-basis math as tax or capital-gains advice.

    Sanity check

    1. A larger loan balance lowers equity but does not change market appreciation.
    2. Selling costs lower cash after sale and profit after costs.
    3. Appreciation percent should be positive when current value is above purchase price.
    4. Depreciation should appear only when current value is below purchase price.
    5. Profit after costs can be lower than equity because basis and costs may matter.
    Practice the distinction Pass Texas drills equity, appreciation, and profit traps.

    Use the calculator, Math Coach, Trap Library, and Texas-specific questions at passtexasrealestate.com.

    Get Pass Texas

    Sources reviewed June 2026: TREC (Texas Real Estate Commission) Real Estate Sales Agent Candidate Handbook, Pearson VUE Texas Real Estate testing materials, TRELA (Texas Occupations Code Ch. 1101) real estate definitions, IRS Publication 523, IRS Publication 551, and Pass Texas math framework. For exam prep only, not investment, appraisal, tax, accounting, or legal advice.

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