Depreciation Recapture Calculator
See how a property sale splits into a recaptured portion taxed at up to 25% and a capital-gain portion at 0/15/20% — and the blended rate on your whole gain.
Your numbers
Amount realized minus your adjusted basis. Use the capital gains calculator if you need to find it.
Cumulative depreciation claimed while you owned the property.
Recapture is taxed at your ordinary rate, capped at 25%.
Your estimate
| Component | Amount | Tax |
|---|---|---|
| Recapture | — | — |
| Long-term gain | — | — |
| State | — | — |
| Total | — |
Recapture is often the most painful layer. A 1031 exchange into a DST defers it along with the capital gain. Talk to an advisor →
Why one sale is taxed at two rates
When you sell a depreciated property, the IRS splits your gain in two. The part that simply reflects appreciation is taxed at the favorable long-term capital-gains rate. But the part that exists because you took depreciation — the "unrecaptured Section 1250 gain" — is taxed at your ordinary rate, capped at 25%.
- Recapture comes first. Up to the total depreciation you claimed is treated as recapture; only gain beyond that is capital gain.
- It can dominate the bill. On a long-held, heavily depreciated building, the recapture layer is often larger than the appreciation layer.
- It's deferrable. A 1031 exchange carries the recapture forward into the replacement property rather than triggering it.
For the full picture including the 3.8% NIIT and federal bracket stacking, use the capital gains tax calculator, and read the memo on depreciation recapture.
This tool is for general educational purposes only. It produces a simplified estimate, not tax advice, and omits many situational rules (stacking with other income, AMT, state-specific treatment, partial-year and like-kind nuances). Your actual tax depends on your full return. Always confirm with your CPA before acting.
Is depreciation recapture really 25%?
25% is the maximum. The recaptured amount is taxed at your ordinary marginal rate but capped at 25%, so lower-income sellers may pay less.
What if I didn't take depreciation?
The IRS recaptures depreciation 'allowed or allowable' — meaning you can owe recapture on depreciation you were entitled to even if you never claimed it. Talk to your CPA.
Does a 1031 exchange avoid recapture?
It defers it. Recapture isn't forgiven in a 1031 — it carries into the replacement property and is deferred until a later taxable sale, or potentially erased by a step-up at death.
Is recapture subject to the 3.8% NIIT?
Yes — recapture gain is investment income, so it can also be subject to the net investment income tax. The capital gains calculator includes that layer.