Our Real Estate Capital Gains Tax Calculator simplifies the complex process of estimating capital gains tax on property sales. It applies IRS rules for primary residence exclusions, depreciation recapture, and long-term capital gains rates to provide accurate tax estimates for real estate transactions.

Understanding Real Estate Capital Gains Tax

Real estate capital gains tax applies when you sell property for more than you paid (adjusted for improvements and depreciation). Primary residences qualify for significant exclusions ($250k/$500k), while investment properties face depreciation recapture and full capital gains tax. Understanding these rules helps maximize tax savings when selling real estate.

• Primary residence exclusion: Up to $250k (single) or $500k (married) tax-free if owned 2+ years and lived in 2+ of last 5 years
• Depreciation recapture: Rental property depreciation is recaptured at up to 25% when sold
• Cost basis includes purchase price plus improvements that add value (not maintenance)
• Long-term rates (0%, 15%, 20%) apply if held >1 year; short-term uses ordinary income rates
• Improvements increase cost basis, reducing taxable gain and tax owed
• 1031 exchanges can defer taxes on investment property by exchanging for like-kind property

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