1. Enter sale details
Provide the total sales price including any debt the buyer assumes, then subtract selling costs such as commissions, title fees, and closing costs.
Capital Gains Tax Calculator
Estimate your capital gains tax exposure and net proceeds from the sale of an investment property or other long-term asset. Enter sale details, cost basis, depreciation, and your state to calculate your total estimated federal and state tax liability.
Sales Proceeds
Total Sales Price (Including Debt):
$
Total Sales Cost:
$
Total Sales Proceeds (Including Debt):
$0
Basis
Original Purchase Price:
$
Accelerated Depreciation Utilized:
$
Straight Line Depreciation Utilized:
$
Purchase Price Basis:
$0
Capital Improvements:
$
Total Estimated Basis:
$0
Capital Gains
Total Sales Proceeds (Including Debt):
$0
Total Estimated Basis:
$0
Total Estimated Capital Gains:
$0
Estimated Capital Gains Taxes
Total Estimated Capital Gains:
$0
Federal Capital Gains + Medicare Tax Rate:
23.8%
Federal Capital Gains + Medicare Taxes:
$0
Depreciation Subject to Recapture Tax:
$0
Depreciation Recapture Surcharge:
5.00%
Total Depreciation Recapture Surcharge:
$0
Total Estimated Capital Gains:
$0
State Income Tax Rate on Capital Gains:
State Capital Gains Income Tax:
$0
Federal Capital Gains + Medicare Taxes:
$0
Depreciation Recapture Surcharge Tax:
$0
State Capital Gains Income Tax:
$0
Total Estimated Capital Gains Tax:
$0
Estimated After-Tax Equity (Net Proceeds)
Total Sales Proceeds (Including Debt):
$0
Debt on Relinquished Investment:
$
Gross Equity Proceeds from Sale:
$0
Total Estimated Capital Gains Tax:
$0
Net Equity Proceeds From Sale:
$0
For illustration purposes only. Consult your CPA or tax attorney — carryover losses and other factors may reduce your actual liability.
On this page
calculator guide
How the capital gains tax calculator works
This calculator estimates your federal and state capital gains tax liability from the sale of an investment property or long-term asset. Enter the total sale price including any debt assumed by the buyer, subtract selling costs such as agent commissions and closing fees, then provide your original purchase price, total depreciation claimed, and any capital improvements to establish your adjusted tax basis. The difference between net sale proceeds and that basis is your estimated capital gain.
The federal rate of 23.8% combines the long-term capital gains rate of 20% with the 3.8% Medicare Net Investment Income Tax. The depreciation recapture surcharge of 5% represents the additional tax on depreciation claimed, reflecting the Section 1250 recapture rate above the base capital gains rate. Select your state to include the applicable state income tax rate on capital gains.
2. Enter your cost basis
Input the original purchase price, all depreciation claimed (accelerated and straight-line), and any capital improvements that increased the property's value.
3. Add debt and select your state
Enter outstanding debt on the property and choose your state to include the state capital gains income tax rate in the total estimated liability.
4. Review your net proceeds
The after-tax equity section shows gross proceeds minus debt and taxes — your estimated cash-in-hand after the sale closes and all tax obligations are met.
tax basics
Capital gains tax on investment property explained
Capital gains tax is owed when you sell an asset for more than your adjusted cost basis. For investment property held longer than one year, long-term capital gains rates apply. The federal long-term capital gains rate tops out at 20% for higher-income taxpayers. An additional 3.8% Medicare Net Investment Income Tax applies to taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly), bringing the combined federal rate to 23.8%.
Your taxable gain is not simply sale price minus purchase price. Depreciation claimed during ownership reduces your cost basis, which increases the taxable gain. Capital improvements increase your basis, which reduces it. Both accelerated depreciation from cost segregation studies and straight-line depreciation are factored into the adjusted basis and the recapture calculation.
depreciation recapture
Depreciation recapture and the surcharge
Depreciation recapture is the IRS mechanism that taxes the depreciation deductions you claimed during ownership at the time of sale. Straight-line depreciation on real property (Section 1250) is subject to a maximum recapture tax rate of 25%. Because this calculator applies a 20% base federal rate, the additional 5% surcharge shown in the results represents that extra recapture rate applied to the total depreciation utilized — bringing the effective recapture rate to 25%.
The more depreciation you have claimed through the life of the asset, the higher the recapture tax will be. Accelerated depreciation from cost segregation studies increases this amount significantly. Investors who want to defer both capital gains and depreciation recapture often pursue 1031 tax-deferred exchanges, which allow the tax obligation to roll forward into a replacement property indefinitely.
| Tax component | Rate | Applied to |
|---|---|---|
| Federal long-term capital gains | 20.00% | Net capital gain above adjusted basis |
| Medicare Net Investment Income Tax | 3.80% | Net investment income (higher earners) |
| Combined federal rate | 23.80% | Total estimated capital gain |
| Depreciation recapture surcharge | 5.00% | Total depreciation claimed (accel + straight-line) |
| State capital gains tax | Varies by state | Capital gain — see dropdown for your state rate |
state tax rates
State capital gains tax rates by state
Most states tax capital gains as ordinary income at the state income tax rate. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — have no income tax on capital gains, leaving only the federal obligation. California has the highest combined burden at 13.30% state rate, which when added to the 23.80% federal rate produces a combined effective rate exceeding 37% before depreciation recapture.
The rates shown in this calculator reflect top marginal state rates. Your actual state liability may differ based on total income, filing status, and state-specific rules. Always confirm current rates with a local tax professional, as state legislatures update rates periodically.
after-tax equity
How net equity proceeds are calculated
Net equity proceeds represent the actual cash available after paying off the mortgage and covering the total estimated tax liability. The calculator first subtracts outstanding debt from total sale proceeds to arrive at gross equity. It then subtracts the combined federal, depreciation recapture, and state tax burden to produce net equity proceeds.
This figure is often significantly lower than sellers expect because it accounts for both the loan payoff and the full tax burden simultaneously. Comparing this number against a potential 1031 exchange outcome can illustrate why tax deferral strategies are commonly used: deferring the full tax liability preserves more capital for reinvestment into the replacement property.
examples
Example capital gains tax calculations
These scenarios illustrate how sale price, basis, depreciation, debt, and state selection interact to produce different tax and net equity outcomes.
Simple residential sale in FL
Sold for $500,000 (no debt, no depreciation) with $300,000 original purchase price. Capital gain: $200,000. Federal tax: ~$47,600. State tax: $0 (FL). Total estimated tax: ~$47,600.
Investment property with depreciation in CA
Sold for $800,000 with $150,000 total depreciation and $350,000 purchase price in CA. Depreciation recapture surcharge plus 13.30% state rate can push total tax above $175,000.
High-debt rental property
Sold for $1,200,000 with $900,000 debt and $400,000 basis. Gross equity is $300,000. After capital gains taxes on the $800,000 gain, net equity may be considerably lower than the gross equity figure suggests.
No-tax-state advantage
Selling an investment property in TX, FL, or NV avoids state capital gains tax entirely, capping the combined rate at 23.80% plus any depreciation recapture surcharge.
privacy
Privacy and data handling
All calculations run locally in your browser. No financial data entered into this calculator is submitted to a server or stored externally. Resetting or closing the page clears all entered values.
faq
Frequently asked questions
What federal rate does this calculator use?
The calculator uses a combined federal rate of 23.80%, which includes the 20% long-term capital gains rate and the 3.8% Medicare Net Investment Income Tax applicable to higher-income investors.
What is the depreciation recapture surcharge?
It is the additional 5% above the base capital gains rate applied to total depreciation claimed. Section 1250 real property recapture is taxed at up to 25%, so the 5% surcharge on top of the 20% base rate reflects that recapture rate.
Does this calculator account for carryover losses?
No. Capital loss carryovers from prior years can reduce your taxable gain. Consult a CPA to apply carryover losses accurately to your specific situation.
Is this accurate for short-term capital gains?
No. This calculator assumes long-term rates for assets held more than one year. Short-term gains are taxed as ordinary income at your marginal rate, which can be significantly higher.
What strategies can reduce capital gains tax on investment property?
Common legal strategies include 1031 tax-deferred exchanges (defer both gains and recapture), installment sales, opportunity zone investments, and timing the sale to a lower-income year. A tax professional can assess which strategies apply to your situation.
Is any financial data submitted to a server?
No. All calculations run in your browser. No data is transmitted, stored, or shared externally.