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.

Reviewed August 30, 2026 · Pearson VUE outline #094401 · IRS Publications 551 and 946

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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

Name the final ask before touching the numbers.
Use current value minus loan only for equity.
Use purchase price as the denominator for appreciation percent.
Subtract payoff and selling costs only when the question asks for sale cash or net result.
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

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

Work it without the answer showing

Name the requested concept before selecting numbers. Market value, debt, adjusted basis, and selling costs belong in different formulas.

Problem 1 · separate the answers$350,000 purchase, $420,000 current value, $286,000 payoff, $4,500 basis-eligible purchase costs, $18,000 improvements, and $26,000 selling costs. Find equity, market appreciation, amount realized, adjusted basis, gain, and cash after sale.

Concept
Formula
Substitution
Answer

Problem 2 · market decline$350,000 purchase, $280,000 current value after four years, and $300,000 payoff. Find market change amount, total change rate, annualized change rate, and equity.

Concept
Formula
Substitution
Answer

Problem 3 · straight-line practice$275,000 depreciable basis, zero salvage value, 27.5-year supplied useful life, and five elapsed years. Find annual, monthly, and accumulated depreciation plus remaining book value.

Concept
Formula
Substitution
Answer

Answer key

Equity is $134,000. Market appreciation is $70,000 or 20%. Amount realized is $394,000. Adjusted basis is $372,500. Gain is $21,500. Cash after sale is $108,000.
Market change is -$70,000. Total change rate is -20%. Annualized change is (280,000 / 350,000)^(1/4) - 1 = -5.4258%. Equity is -$20,000.
Annual depreciation is $275,000 / 27.5 = $10,000. Monthly depreciation is $833.33. Accumulated depreciation is $50,000. Remaining book value is $225,000.

Sanity check

A larger loan balance lowers equity but does not change market appreciation.
Selling costs lower cash after sale and profit after costs.
Appreciation percent should be positive when current value is above purchase price.
Market depreciation appears when current value is below purchase price. Straight-line cost recovery is a separate calculation based on supplied basis, salvage value, and useful life.
Profit after costs can be lower than equity because basis and costs may matter.