Capital gains tax calculator for real estate (2026)

How this is calculated (tax year 2026)

Gain = sale price minus selling costs, minus what you paid plus improvements, plus depreciation taken. The part of the gain equal to depreciation is taxed at the 25% recapture cap. The rest is long-term capital gain, taxed at 0%, 15% or 20% depending on where it lands on top of your other taxable income and the recaptured amount. Brackets for 2026 come from IRS Rev. Proc. 2025-32, section 4.03. The 3.8% net investment income tax applies to the gain or to your income above the threshold, whichever is smaller, using the statutory thresholds listed by the IRS. Your other taxable income stands in for modified AGI. Selling costs are the percentage you enter times the sale price. State tax uses the state you pick: its 2026 brackets (from the Tax Foundation 2026 table) applied to the gain stacked on top of your other taxable income, plus any state exclusion for long-term gains. State deductions, credits and local taxes are left out. Washington exempts real estate from its capital gains tax, so it shows 0%. For states marked “rate not verified,” enter the rate yourself.

This is a simplified federal estimate. It assumes you held the property more than a year, and it leaves out the alternative minimum tax, passive loss carryovers, installment sales and state-specific rules. Recapture can be lower than 25% if your ordinary rate is lower.

FAQ

How much tax does a 1031 exchange defer?

A full exchange can defer federal capital gains tax, depreciation recapture, the 3.8% net investment income tax where it applies, and usually state tax on the gain.

What are the 2026 long-term capital gains brackets?

For tax year 2026, the 0% rate applies to taxable income up to $49,450 (single) or $98,900 (married filing jointly), 15% up to $545,500 (single) or $613,700 (joint), and 20% above that, per IRS Rev. Proc. 2025-32.

What is depreciation recapture on rental property?

Gain equal to the depreciation you took on real estate (unrecaptured Section 1250 gain) is taxed at your ordinary rate, capped at 25%. This calculator shows it at the 25% cap.

When does the 3.8% net investment income tax apply?

It applies to the smaller of your net investment income or the amount your modified AGI exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). These thresholds are set by law and not indexed for inflation.