Depreciation recapture calculator for rental property

 

🏠 Depreciation Recapture Calculator

For Rental Property & Real Estate Investors | IRS Section 1250 Tax Estimator

📈 Capital Gains Tax • 1031 Exchange Alternative • Real Estate CPA Tool

📘 How to use this depreciation recapture calculator

1. Purchase Price – Enter what you originally paid for the rental property (total cost basis).
2. Land Value (Optional) – Only land doesn't depreciate. If you know land portion, enter it; otherwise leave 0. Depreciable basis = Price - Land.
3. Total Depreciation Taken/Allowed – Sum of all depreciation deductions you claimed (or could have claimed) over holding period. IRS requires recapture of the lesser of gain or accumulated depreciation.
4. Sale Price – Final selling price of the property.
5. Selling Expenses – Commissions, legal fees, transfer taxes, etc.
6. Ordinary Income Tax Rate – Depreciation recapture is capped at 25% (federal), but your marginal rate may apply if lower than 25%. Select your bracket.
7. Long-Term Capital Gains Rate – For remaining gain after depreciation recapture (0%, 15%, or 20% based on income). Choose typical.
8. State Tax Rate (optional) – Some states also recapture depreciation. Add if desired.
9. Click Calculate Recapture & Net Proceeds – See instant breakdown: depreciation recapture tax, capital gains tax, total tax liability, and after-tax cash you keep.

💡 Pro tip: Use for rental condo, duplex, or vacation home. Estimate your tax liability before selling.

🏷️ Original Purchase Price (cost basis including land)

🌱 Land Value (non-depreciable) if known, else 0

📉 Total Depreciation Taken (or allowed) accumulated over rental period

💰 Sale Price of Property

📄 Selling Expenses (commissions, transfer fees)

💰 Tax Rates & Recapture Settings ⓘ

10% (low income bracket) 12% 22% 24% 32% 35% 37% 25% (Max recapture rate - typical) 0% (lower income) 15% (most common) 20% (high income)

✨ Depreciation recapture applies to the lesser of: accumulated depreciation OR total gain. Recapture portion taxed up to 25% (ordinary rate if lower).

📋 Tax Liability Summary

Adjusted Basis (Purchase - Land): $0

Realized Gain (Sale Proceeds - Adj Basis): $0

📌 Depreciation Recapture Amount (taxable portion): $0

⚖️ Remaining Capital Gain (after recapture): $0

🏛️ Federal Recapture Tax (max 25%): $0

📈 Long-Term Capital Gains Tax: $0

🗺️ State Tax Liability (on total gain): $0

💸 Total Estimated Tax (Federal + State): $0

🏦 Net Proceeds After Tax (Cash in Pocket): $0

⚠️ Disclaimer: This is an educational estimator. Actual tax liability depends on your specific situation, passive activity loss rules, and other deductions. Consult a CPA or tax professional regarding IRS Form 4797 and Section 1250 recapture rules.