What selling will cost in tax: capital gains, depreciation recapture and NIIT at 2026 rates.
Estimate the tax on selling a house, rental or land before you list it. Enter the sale, what you paid, improvements and any depreciation, and this real estate capital gains tax calculator works out the federal capital gains tax, depreciation recapture, the 3.8% net investment income tax and a state estimate, using 2026 federal rates.
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How the calculator works
- Gain. Sale price minus selling costs, minus your adjusted basis: what you paid, plus capital improvements, minus any depreciation you took (or could have taken) on a rental.
- Main home exclusion. If it was your main home for at least 2 of the 5 years before the sale, up to $250,000 of gain ($500,000 for most married couples filing jointly) is excluded. Gain from depreciation taken after May 6, 1997 cannot be excluded.
- Depreciation recapture. The part of the gain that comes from depreciation ("unrecaptured Section 1250 gain") is taxed at your ordinary income rate, but no more than 25%.
- Long-term capital gains. The rest of the gain on property owned more than a year is taxed at 0%, 15% or 20%, depending on where it lands on top of your other taxable income. Property owned a year or less is taxed at ordinary income rates.
- Net investment income tax. 3.8% on investment gains when your modified adjusted gross income is over $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). The calculator estimates your income as your other taxable income plus the standard deduction plus the gain.
2026 long-term capital gains brackets
From the IRS's 2026 inflation adjustments (Rev. Proc. 2025-32), based on total taxable income including the gain:
| Filing status | 0% up to | 15% up to | 20% above |
|---|---|---|---|
| Single | $49,450 | $545,500 | $545,500 |
| Married filing jointly | $98,900 | $613,700 | $613,700 |
| Head of household | $66,200 | $579,600 | $579,600 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
Worked example
The calculator opens with a married couple selling a rental for $400,000 with $28,000 of selling costs. They paid $250,000, added $30,000 of improvements and took $40,000 of depreciation, so their adjusted basis is $240,000 and the gain is $132,000. They have $90,000 of other taxable income.
- Depreciation recapture: the first $40,000 of gain fills their income from $90,000 to $130,000 at ordinary rates (12% and 22%): $7,720.
- Capital gains: the other $92,000 lands between $130,000 and $222,000, all inside the 15% bracket: $13,800.
- Net investment income tax: their estimated income is about $4,200 over the $250,000 threshold: $160.
- State tax at 5%: $6,600. Total: about $28,280, a 21.4% effective rate on the gain.
Ways investors reduce or defer the tax
- Hold for more than a year to get long-term rates instead of ordinary rates.
- Keep records of improvements: every dollar added to the basis is a dollar less gain.
- A 1031 exchange defers the tax on an investment property by buying another one. Try the 1031 exchange calculator.
- Sell in a lower-income year, when more of the gain may fall in the 0% or 15% bracket.
- An installment sale spreads the gain over the years you receive payments; see the seller financing calculator.
Frequently asked questions
Is this exactly what I will owe?
No. It is an estimate of the federal tax using 2026 rates and a flat state rate. Your real bill depends on your full return, other gains and losses, carryovers, state rules and credits. Use it to plan, and confirm with a CPA before you sell.
Do I pay depreciation recapture even if I never claimed depreciation?
Generally yes. The rules use the depreciation you were allowed to take on a rental, even if you did not claim it, so enter the depreciation you could have taken.
Does the main home exclusion apply to a house I rented out?
It can, if you lived in it as your main home for at least 2 of the 5 years before the sale, but gain from depreciation is still taxed, and periods of rental use after 2008 can reduce the exclusion. Those cases are complicated; ask a tax professional.
What counts as a capital improvement?
Work that adds value, extends the property's life or adapts it to a new use, such as a new roof, an addition or a kitchen remodel. Ordinary repairs and maintenance do not count.