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🔄 Depreciation Recapture Calculator

Calculate Section 1250 depreciation recapture tax (25%) plus long-term capital gains when selling rental property. Compare to 1031 exchange.

📍 Property Address (optional)
InputsYour Numbers
Property Sale Details
Sale Price?
$
Original Purchase Price?
$
Land Value (at purchase)?
$
Capital Improvements?
$
Years Owned?
Depreciation Details
Total Depreciation Taken ($)?
$
Your Tax Situation
Federal Tax Bracket %?
%
Taxable Income (without sale)?
$
Pro Forma: 1031 Exchange
Replacement Property Price?
$
As-Is AnalysisCurrent
Enter values to see results
Recapture Tax
--
25% on depr. taken
Capital Gains Tax
--
on remaining gain
Total Tax Bill
--
federal estimate
Net After-Tax Proceeds
--
what you keep
Gain Calculation
Sale Price--
Original Purchase Price--
Land Value (excl.)--
Capital Improvements--
Accumulated Depreciation (taken)--
Adjusted Cost Basis--
Total Gain--
Tax Breakdown
Recapture Amount (depr. taken)--
Recapture Tax Rate25%
Depreciation Recapture Tax--
Capital Gain (above recapture)--
Long-Term Capital Gains Tax--
Total Federal Tax--
Pro FormaAfter Plan
Enter pro forma values
Tax Deferred (1031)
--
if you exchange
Replacement Property
--
your upleg
Capital Available
--
all equity reinvested
New Depreciation Basis
--
on replacement
1031 vs Selling Outright
Tax if You Sell Now--
Tax if You 1031$0 deferred
Immediate Savings--
Replacement Property Basis--

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1
Enter Sale Price
The price you are selling for determines your total gain.
2
Enter Cost Basis
Adjusted basis = original price - land + improvements - depreciation taken. Depreciation reduces your basis, which increases the gain.
3
Enter Depreciation Taken
Find this on your tax returns (Form 4797 or Schedule E). Estimate: (price - land + improvements) / 27.5 x years owned.
4
Understand the Recapture Rate
Depreciation recapture is taxed at a maximum of 25% (Section 1250 unrecaptured gain). This is separate from and generally higher than long-term capital gains rates.
5
See Total Tax Liability
Total = recapture tax (25%) + LTCG on remaining gain (0/15/20%) + NIIT if applicable. For many investors, recapture is the largest single tax item on a sale.
6
1031 to Defer Everything
A 1031 exchange defers ALL of the tax: both recapture and capital gains. The calculator shows exactly how much you save by exchanging rather than selling.

When you sell a rental property, the IRS requires you to pay tax on all depreciation you previously claimed -- even if you no longer have the cash. This is depreciation recapture, taxed at a maximum of 25% under Section 1250.


The trap: you claimed depreciation to reduce annual taxes, which also reduced your cost basis. When you sell, the lower basis means a higher gain. That gain is partially characterized as recapture (taxed at 25%) and partially as long-term capital gain (taxed at 0/15/20%).


The only way to avoid this tax is a 1031 exchange into a like-kind replacement property, or holding the property until death (when heirs receive a stepped-up basis, eliminating the recapture tax permanently).

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