Depreciation Recapture Calculator — Rental Property Sale Tax Estimate

What will selling this rental property actually cost you in tax?

Enter what you paid, what you claimed in depreciation, and what you're selling for. This splits your gain into the part taxed as depreciation recapture (ordinary rates, capped at 25%) and the part taxed at your regular long-term capital-gains rate, then shows how much a 1031 exchange would defer instead.

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Keeping the property and just need this year's quarterly filing instead? The quarterly estimated tax calendar is for the ongoing rental income — this page is for the one-time tax on selling it.

Doing this by hand or in a spreadsheet? See where that usually goes wrong.

Shopping for a 1031 replacement property through a marketplace like Realized? See how this calculator differs.

Your numbers

Original purchase price ($)

Land value at purchase ($)

Capital improvements since purchase ($)

Total depreciation claimed ($)

Selling price ($)

Selling costs ($)

Remaining mortgage payoff ($, optional)

Your long-term capital-gains rate

Your ordinary marginal tax rate ($, optional)

Add the 3.8% Net Investment Income Tax (high-income filers)

Considering a 1031 exchange instead?

Cash or debt relief you'd actually receive ($, "boot")

Enter your purchase price, depreciation claimed, and selling price above, then click Calculate.

What this does and doesn't do

This applies IRC Section 1250's recapture rule (ordinary rate, capped at 25%) to the depreciation you actually claimed, taxes the remaining gain at the long-term capital-gains rate you select, and optionally adds a simplified Net Investment Income Tax. It does not include state tax, does not apply the NIIT's exact MAGI-threshold test, and does not determine whether a specific 1031 exchange qualifies. Treat every number here as a planning estimate to verify with a CPA or qualified intermediary before you sell, never as a filed amount or a determination made on your behalf.

Common questions

What is depreciation recapture?

Every dollar of depreciation you claimed while renting the property lowers its cost basis, which raises your taxable gain by the same amount when you sell. IRC Section 1250 taxes that portion of the gain — called unrecaptured Section 1250 gain — at your ordinary income tax rate, capped at 25%, instead of your usual (often lower) long-term capital-gains rate.

How is the recapture tax different from capital-gains tax?

Your total gain is split into two pieces. The first, equal to the depreciation you actually claimed (or the total gain, if smaller), is taxed at your ordinary rate up to a 25% cap. Only the remaining gain, above that amount, is taxed at your regular long-term capital-gains rate (0%, 15%, or 20%, depending on your income).

Does a 1031 exchange avoid this tax completely?

A fully qualifying like-kind exchange — reinvesting all the proceeds into a replacement property of equal or greater value through a qualified intermediary, within the 45-day identification and 180-day closing windows — defers the entire gain, recapture included. Any cash or net debt relief you actually receive out of the exchange, known as boot, is still taxed immediately, in the same recapture-then-capital-gains order as an outright sale — see whether that boot is taxed at your average rate for a worked example of how much that ordering can cost a guess that assumes it is.

Is this tax advice?

No. It applies the published Section 1250 recapture rule and standard capital-gains brackets to numbers you already have from your own purchase and sale settlement statements and depreciation schedule, as a planning estimate — not a filed amount, not a determination that a specific 1031 exchange qualifies, and not a substitute for a CPA or a qualified intermediary.

What isn't included in this estimate?

State income tax (most states tax this gain too, often without a capital-gains discount), the Net Investment Income Tax's exact MAGI-threshold test (this tool offers a simplified full-inclusion version), and Section 1231 loss treatment if the sale is actually at a loss. Each is flagged in the results when it applies to your numbers.