Rental Property Capital Gains Tax Calculator
Capital gains, depreciation recapture, NIIT, and state tax when you sell a rental
Selling a rental? The tax bill is almost never just "15% of your profit." This calculator computes your real gain from what you paid, what you improved, and what you depreciated — then decomposes the tax at close into federal capital gains (stacked across the 0%, 15%, and 20% brackets on top of your other income), 25% depreciation recapture, the 3.8% net investment income tax, and your state's cut. You'll see the total bill, your net proceeds after tax, and where every dollar of gain lands.
What the buyer is paying.
Commission, title, transfer tax — these reduce your taxable gain.
What you originally paid.
Roof, addition, renovation — not repairs. Adds to your basis.
Total depreciation over your ownership — it's on your tax returns (Schedule E / Form 4562). The IRS applies recapture whether you claimed it or not ("allowed or allowable").
Taxable income for the year besides this sale — sets where your gain starts stacking.
Flat rate on the gain. Enter 0 for no-income-tax states.
If so, the §121 exclusion (up to $250k single / $500k married filing jointly) can shelter the regular gain — but never the depreciation taken while it was a rental.
On $102,000 across the 0/15/20% brackets
25% of $70,000 — recognized first
3.8% above the MAGI threshold
5.0% flat on the gain
Your $102,000 long-term gain sits on top of $155,000(other income + recapture gain), so it's taxed bracket by bracket from there up.
Estimates use 2026 federal brackets and thresholds. This is a planning estimate, not tax advice — bring it to your tax professional before acting on it.
Simplifications: no AMT; state tax as one flat rate (no state brackets); investment income for the 3.8% NIIT approximated as other income plus the recognized gain; no capital-loss carryforwards; depreciation recapture at the full 25% cap (yours can be lower if your ordinary bracket is); no §453A interest charge on very large installment balances; no Medicare IRMAA effects.
See the other side of this bill in GoFlexi
This free tool shows what a lump-sum sale costs. The full GoFlexi calculator models the alternative — carrying a seller-financed note: the payment schedule, what the note earns you, and the tax benefit of spreading the gain across years.
...and more — full deal-structuring, resources, lessons, and community access.
About This Rental Property Capital Gains Tax Calculator
Your taxable gain is not sale price minus purchase price. It starts from your adjusted basis — purchase price, plus capital improvements (a roof, an addition, a renovation; not repairs), minus every dollar of depreciation you took while renting. Selling costs (agent commission, title, transfer tax) reduce the amount you're treated as receiving. The gain is what's left: sale price, minus selling costs, minus adjusted basis. Because depreciation lowers your basis, years of depreciation deductions quietly grow the gain you'll eventually be taxed on — which is why the bill on a long-held rental surprises so many landlords.
Depreciation recapture is usually the part sellers don't see coming. The slice of your gain attributable to depreciation — technically "unrecaptured section 1250 gain" — doesn't get the friendly capital-gains brackets. It's taxed at up to 25%, and it comes first: the IRS treats your gain as depreciation coming back before any of it qualifies for the 0/15/20% rates. And it applies whether or not you actually claimed the depreciation — the rule is "allowed or allowable," so skipping the deduction on your returns doesn't make the recapture go away at sale.
The rest of the gain stacks on top of your other taxable income and is sliced across the long-term capital-gains brackets: 0%, then 15%, then 20% as the running total crosses each threshold for your filing status. On top of that, if your income including the gain crosses the net investment income tax threshold ($200,000 single, $250,000 married filing jointly), a 3.8% NIIT applies to the excess. Most states then tax the gain as ordinary income at their own rates. This calculator shows each component separately, so you can see exactly why the effective rate on a rental gain often lands in the mid-20s even for a "15% bracket" seller.
Once you know the bill, you have three real exits. One: sell conventionally and pay it — simplest, and sometimes right. Two: a 1031 exchange — defer everything by trading into another investment property, at the cost of strict deadlines (45 days to identify, 180 to close), like-kind constraints, and staying a landlord. Three: an installment sale — carry owner financing and spread the gain across the years you receive principal, which defers tax like a 1031 but can also permanently shrink it: instead of one lump sum stacking your entire gain into the 20% bracket and NIIT territory in a single year, each year's slice may land back down in the lower brackets. Unlike a 1031, there's no deadline, no replacement property, and you're done being a landlord — you hold a note instead.
Use the calculator to get your number, then look at the decomposition before you decide anything. If recapture and bracket-stacking dominate your bill, that's precisely the situation where spreading the gain with seller financing (or deferring it with a 1031) changes the outcome the most. All figures are estimates using current-year federal brackets and a flat state rate — bring the result to your tax professional before you act on it.