Capital Gains Tax Calculator
Estimate Your Capital Gains Tax & Total Tax Liability with Ease
Investment property sales can attract a staggering tax liability of up to 42.1%. This burden consists of various components like Federal Capital Gains Tax (ranging from 0%, 15%, 20%), State Capital Gains Tax (0% to 13.3%), Depreciation Recapture Tax (25%), and Net Investment Income Tax (either 0% or 3.8%).
All these numbers can be overwhelming, but that’s where our Capital Gains Tax Calculator steps in. It simplifies these complex calculations to give you an aggregate amount representing your maximum tax liability. And here’s the game-changer: these taxes can be deferred using a 1031 Exchange! Plus, for properties initially acquired through a 1031 Exchange, our calculator accommodates deferred gains for a more accurate tax liability estimate.
How to Use This Calculator
This calculator estimates your total capital gains tax liability when selling an investment property. It accounts for every layer of tax most sellers face:
- Depreciation Recapture Tax (25%): Taxes the depreciation you claimed over the years
- Federal Capital Gains Tax (15% or 20%): Based on your income bracket
- Net Investment Income Tax / NIIT (3.8%): Applies to high earners
- State Capital Gains Tax (0–13.3%): Varies by state; California is the highest
What you’ll need:
- Original purchase price of the property
- Total improvements made over your holding period
- Total depreciation claimed (check your tax returns or Form 4562)
- Expected sale price and estimated closing costs
- Any outstanding loan balances
Work through all 6 steps in order. Each section builds on the previous one. To proceed, please input your figures in the blue boxes below, then click the Calculate button in each section to calculate the results.
* The Federal capital gain tax rate is generally 15% or 20% depending upon taxable income. Single taxpayers with over $533,400 in taxable income and taxpayers filing as married filing jointly with over $600,050 in taxable income pay the higher 20% capital gain tax rate.
** The 3.8% NIIT surtax only applies to “net investment income” as defined in IRC §1411.
Frequently Asked Questions
How do I calculate capital gains tax on the sale of investment property?
Capital gains tax on investment property is calculated by subtracting your adjusted basis (original purchase price + improvements minus depreciation) from your net sale price (sale price minus closing costs). The resulting gain is then taxed at federal rates of 0%, 15%, or 20% depending on your income, plus a 25% depreciation recapture rate on prior depreciation claimed, plus your state’s capital gains rate. Our calculator above handles all of this automatically.
What is the capital gains tax rate on real estate in 2025?
For most real estate investors, the federal long-term capital gains tax rate is 15% (for income between $48,351 and $533,400 for single filers, or $96,701 and $600,050 for married filing jointly). High earners pay 20%. On top of that, depreciation recapture is taxed at 25%, and the 3.8% Net Investment Income Tax (NIIT) applies to taxpayers above those thresholds. State taxes range from 0% (Texas, Florida, Nevada) to 13.3% (California). Total liability can reach 42.1%.
What is depreciation recapture and how is it taxed?
Depreciation recapture is the IRS’s way of “recapturing” the tax deductions you took for property depreciation over your holding period. When you sell, the portion of your gain attributable to depreciation is taxed at a flat 25% federal rate, which is higher than the standard capital gains rate. Use our Depreciation Recapture Calculator for a dedicated estimate.
Which states have no capital gains tax?
The following states have no income or capital gains tax on investment property sales: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you own property in one of these states, your state tax line will be $0 in the calculator.
Can I avoid capital gains tax by doing a 1031 exchange?
Yes. A 1031 exchange allows you to defer 100% of your capital gains tax (federal and state) by reinvesting your sale proceeds into a like-kind replacement property within IRS deadlines. This is one of the most powerful tax deferral strategies available to real estate investors. Our calculator shows you “Analyze Reinvestment on Exchange” (Step 6) to illustrate the difference between selling outright and doing an exchange.
What is the Net Investment Income Tax (NIIT)?
The 3.8% NIIT surtax applies to “net investment income” (including capital gains from property sales) for taxpayers above certain income thresholds ($200,000 for single filers, $250,000 for married filing jointly). It was introduced by the Affordable Care Act and is codified under IRC §1411.
Single Taxpayer
| Capital Gain Tax Rate | Section 1411 NIIT Surtax | Combined Tax Rate | |
|---|---|---|---|
| $0 – $48,350 | 0% | 0% | 0% |
| $48,351 – $533,400 | 15% | 0% | 15% |
| $533,401 or more | 20% | 3.8% | 23.8% |
Married Filing Jointly Taxpayer
| Capital Gain Tax Rate | Section 1411 NIIT Surtax | Combined Tax Rate | |
|---|---|---|---|
| $0 – $96,700 | 0% | 0% | 0% |
| $96,701 – $600,050 | 15% | 0% | 15% |
| $600,051 or more | 20% | 3.8% | 23.8% |