Subtract that number from your anticipated net sale and that would be your taxable gain.Here's a couple options1.

By going the water-box route, the net operating income is less after you subtract the ongoing maintenance costs, thus less terminal value. 

You take the gross annual income for the property and then subtract all of the operating expenses.

You then subtract the Rehab estimate, Closing costs, and Holding costs from that amount.  

You'll find your MAO (maximum allowable offer) buy taking the ARV then subtracting all rehab expenses, holding/transactional costs and desired profit.

Just look at the going rental rates (from the time we purchased) and subtract the amount that corresponds to the percentage ownership we hold?

I did hear of another rule that said take the ARV x 90% to take out holding costs, then subtract repair costs and the profit you want and use that as max offer price.

Take the ARV and multiple it by .7 ($227,500) then subtract the repair cost of 50k ($177,500).

Some people use the 70% rule: Take 70% of ARV, then subtract rehab costs, you should pay no more than that for the house (so if the house is worth 100K ARV, 70% of that is 70K, then subtract your rehab costs--let's say 20K, then you should offer no more than 50K for the house, leaving you with a 30K profit).

We need to subtract 6% realtor fees and our $5k material cost.