Free rental planning tool
Rental sale tax scenario calculator
Estimate a simplified rental sale gain and tax scenario using basis, depreciation, selling costs, and rates you choose.
How this calculation works
Adjusted basis is original basis plus additions less depreciation. Gain is net sale proceeds less adjusted basis. For this limited depreciable-building scenario, the depreciation-related gain bucket is the smaller of positive gain and depreciation; remaining positive gain uses your other gain rate.
Assumptions to review
Assumes a long-term sale of a rental building with straight-line depreciation. Excludes Section 1245 ordinary-income recapture, Section 1231 lookback, exclusions, exchanges, suspended losses, NIIT, state tax, and bracket calculations. Unrecaptured Section 1250 gain has a maximum 25% federal rate; actual treatment can differ. Losses are shown without estimating tax benefits.
Prepare the records behind a rental sale scenario
Reconcile basis before entering it. Gather purchase and sale closing statements, capital-improvement records and depreciation schedules. Keep original basis, later basis additions and depreciation separate, and avoid entering the same addition twice. The depreciation input includes amounts allowed or allowable; omitting a deduction from a past return does not automatically remove its effect on basis.
Follow proceeds, basis and gain separately. In the starting scenario, $400,000 sale price less $24,000 selling costs gives $376,000 net sale proceeds. Original basis of $250,000 plus $20,000 additions less $40,000 depreciation gives $230,000 adjusted basis and $146,000 gain. Loan payoffs and other closing cash flows need a separate reconciliation; the displayed net proceeds are not a take-home amount after every liability and tax.
Have the rate assumptions reviewed. The entered rates drive this limited building-sale illustration. The calculator does not derive a rate from your filing status, income or other transactions, or decide whether an exclusion, loss, exchange or special treatment applies. Bring the records and scenario to your tax preparer before relying on a tax amount. Keep land, other assets, personal use and the full return under separate review, using the IRS publication below.