Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Total federal tax owed on sale
$34,700
Depreciation recapture tax (25%)
$16,250
Long-term capital gains tax
$18,450
Total gain on sale
$188,000
Net proceeds after federal tax
$388,300
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How to use this
- 1Enter sale price ($).
- 2Enter selling costs ($).
- 3Enter original purchase price + improvements ($).
- 4Enter total depreciation claimed ($).
- 5Enter your long-term capital gains rate (%).
- 6Enter recapture tax rate (max 25%) (%).
- 7Read your total federal tax owed on sale on the right — it updates as you type.
- 8Hit Share to keep the scenario or send it to someone.
About this calculator
When you sell rental real estate, the IRS separates your gain into two buckets taxed differently. The portion equal to depreciation you claimed (Section 1250 unrecaptured gain) is taxed at a maximum federal rate of 25%, regardless of your regular capital gains bracket. Any remaining gain above that is taxed at standard long-term capital gains rates — 0%, 15%, or 20% depending on income. This calculator takes your sale price, selling costs, original purchase price plus capital improvements, and total depreciation claimed over the hold period, and splits the total gain accordingly. It's a common surprise for first-time sellers who assume their entire profit gets the lower capital gains rate; in reality, the more years you held and depreciated, the bigger the chunk taxed at the higher 25% recapture rate. State taxes are separate and this tool doesn't include them — most states tax the whole gain as ordinary income with no capital gains preference at all.
Worked example
Using the values the calculator loads with:
Inputs
- Sale price: 450000 $
- Selling costs: 27000 $
- Original purchase price + improvements: 300000 $
- Total depreciation claimed: 65000 $
- Your long-term capital gains rate: 15 %
- Recapture tax rate (max 25%): 25 %
Results
- Total federal tax owed on sale: $34,700
- Depreciation recapture tax (25%): $16,250
- Long-term capital gains tax: $18,450
- Total gain on sale: $188,000
- Net proceeds after federal tax: $388,300
What each field means
Inputs
- Sale price ($)
- The sale price used in the calculation, measured in $. Starts at 450000 $ so you have a working example on load.
- Selling costs ($)
- The selling costs used in the calculation, measured in $. Starts at 27000 $ so you have a working example on load.
- Original purchase price + improvements ($)
- The original purchase price + improvements used in the calculation, measured in $. Starts at 300000 $ so you have a working example on load.
- Total depreciation claimed ($)
- The total depreciation claimed used in the calculation, measured in $. Starts at 65000 $ so you have a working example on load.
- Your long-term capital gains rate (%)
- The your long-term capital gains rate used in the calculation, measured in %. Starts at 15 % so you have a working example on load. Accepted range: 0–20 %.
- Recapture tax rate (max 25%) (%)
- The recapture tax rate (max 25%) used in the calculation, measured in %. Starts at 25 % so you have a working example on load. Accepted range: 0–25 %.
Results
- Total federal tax owed on sale
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Depreciation recapture tax (25%)
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Long-term capital gains tax
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total gain on sale
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Net proceeds after federal tax
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Is recapture always 25%?
25% is the maximum rate — if your ordinary income tax bracket is lower than 25%, the recapture is taxed at your actual bracket instead, capped at 25%. Most investors in mid-to-high brackets end up paying close to the full 25% on the recapture portion.
Can I avoid recapture entirely?
A 1031 exchange defers both capital gains and recapture as long as you meet the like-kind and reinvestment rules with no boot. Holding until death also erases the issue for heirs via the stepped-up basis rule, though that obviously doesn't help the original owner.
Does this include state tax?
No. Most states tax the entire gain as ordinary income with no special capital gains or recapture rate, so add your state's marginal rate on top of these federal numbers for a full picture.
What if I never claimed depreciation I was entitled to?
The IRS still requires recapture based on depreciation 'allowed or allowable,' meaning you owe the recapture tax on the amount you should have claimed even if you didn't. File Form 3115 to catch up missed depreciation before selling rather than losing the deduction and still owing the recapture tax.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
1031 Exchange Boot and Basis Calculator
Estimate taxable boot and new cost basis on a like-kind exchange.
Cost Segregation First-Year Benefit Calculator
Estimate accelerated depreciation and first-year tax savings from a cost seg study.
Equity Multiple vs IRR Calculator
Compare total return multiple against annualized IRR for a deal.
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Depreciation Recapture on Sale Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/depreciation-recapture-sale
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/depreciation-recapture-sale" target="_blank" rel="noopener">Depreciation Recapture on Sale Calculator — RevenueLab</a> (2026).</p>
Source: [Depreciation Recapture on Sale Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/depreciation-recapture-sale) (2026).