Depreciation Recapture Calculator
2026 rulesFind the tax on the part of your gain that comes from depreciation.
Your numbers
Result
Depreciation recapture tax
- Adjusted basis$220,000
- Total gain$230,000
- Gain from depreciation$80,000
- Taxed at up to 25%$19,086
- Remaining gain at capital gains rates$150,000
- Capital gains tax on it$22,500
- NIIT (3.8%)$5,552
- Total federal tax on the sale$47,138
How it works
Depreciation lowers your basis, so it shows up as gain when you sell. On rental real estate that part is taxed at your ordinary rate, but no more than 25%. On equipment and vehicles it's taxed as ordinary income.
Gain above the depreciation is taxed at the long-term capital gains rates, and the 3.8% NIIT can apply to all of it.
2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments).
Questions
What if I never claimed depreciation?
Recapture applies to depreciation that was allowable, even if you didn't take it. Form 3115 can claim missed depreciation before you sell.
Does a 1031 exchange avoid recapture?
It defers it. The depreciation carries into the replacement property's basis.