Rental Property Sale Tax Calculator
Estimate depreciation recapture, capital gains tax, and net investment income tax when selling a rental property.
Note: The IRS requires depreciation recapture whether or not you actually claimed depreciation deductions. Residential rental property depreciates over 27.5 years.
Net After Tax
$386,482
$185,270 gain less $36,518 in taxes
Total Gain
$185,270
Total Tax
$36,518
Effective Tax Rate
19.7%
Depreciation Recaptured
$87,270
Tax Breakdown
Original Purchase Price$300,000
+ Capital Improvements$25,000
- Accumulated Depreciation (10 yrs)-$87,270
Adjusted Cost Basis$237,730
Sale Price$450,000
- Selling Costs (6%)-$27,000
Net Sale Proceeds$423,000
Total Gain$185,270
Depreciation Recapture Tax (25%)-$21,818
Capital Gains Tax (15%)-$14,700
Net Investment Income Tax (3.8%)-$0
Total Tax-$36,518
Net After Tax$386,482
Save with a 1031 Exchange
You could defer $36,518 in taxes by reinvesting in a like-kind property through a 1031 exchange.
Learn about 1031 Exchanges →Track your property sale and optimize your tax strategy
Track Your Property SaleRelated calculators
Frequently asked questions
What is depreciation recapture when I sell a rental?
The IRS treats the depreciation you took (or were entitled to take) on a rental as "unrecaptured Section 1250 gain" when you sell. That portion of your gain is taxed at ordinary income rates capped at 25%, separately from the rest of your capital gain. You owe it whether or not you actually claimed the deductions each year.
How is the rest of my gain taxed?
Gain above the recaptured depreciation is long-term capital gain if you held the property more than a year, taxed at preferential federal rates that depend on your total taxable income and filing status. State income tax may also apply. This tool estimates the federal pieces only — your actual bracket can differ, so treat the result as a planning estimate, not tax advice.
What is the 3.8% Net Investment Income Tax (NIIT)?
NIIT is an additional 3.8% federal tax on net investment income (including gain on a rental sale) for taxpayers whose modified adjusted gross income exceeds the statutory thresholds — $200,000 single or $250,000 married filing jointly. It applies on top of capital gains and depreciation recapture tax when your income crosses those thresholds.
Can a 1031 exchange defer this tax?
Yes. A properly structured Section 1031 like-kind exchange lets you reinvest the proceeds into another investment property and defer the depreciation recapture and capital gains tax rather than paying it now. There are strict 45-day identification and 180-day closing deadlines, so plan with a qualified intermediary and your CPA before you sell.
Is this calculator tax advice?
No. It is an educational estimate that uses simplified assumptions and current statutory rates. Your real outcome depends on your full tax picture, prior depreciation records, state rules, and any special elections — always confirm with a CPA or tax professional before making a decision.