2026 Tax Year Estimator
Estimate Your 2026 Capital Gains Tax
Use the Easy tab for a quick federal estimate on any asset. Switch to Advanced to model a property sale with depreciation recapture, the 3.8% NIIT, state tax, and a 1031 exchange comparison.
Your estimate
Estimated 2026 tax on short term gain
$0
Federal income tax only. Excludes state tax and the 3.8% net investment income tax. For a property sale with depreciation, use the Advanced tab.
Your estimate
Sell outright vs. 1031 exchange
Equity available to reinvest, assuming a full deferral (all equity reinvested into equal or greater value replacement property).
Tax deferred: $0 (0% more equity working for you)
Talk Through Your Sale →For illustration only; not tax, legal, or investment advice. Estimates use 2026 federal brackets and capital gains thresholds from IRS Rev. Proc. 2025-32, the 3.8% NIIT thresholds, and 2026 top state rates from the Tax Foundation. Taxable income is used as a proxy for MAGI, state tax is applied at a flat top rate, and the tool does not account for capital loss carryovers, AMT, local taxes, installment sales, or suspended passive losses. Please confirm figures with your CPA or tax attorney before acting.
Selling an asset for a profit is usually good news. Still, the tax bill can be a surprise even for seasoned investors. Our capital gains tax calculator above gives a fast 2026 estimate for any asset, and its Advanced mode models the layers that apply to investment real estate. In this article, we'll explain how each mode works and how you can use it to calculate your capital gains tax liability.
Key Takeaways
- ▸The Easy tab estimates federal tax on a simple gain using the 2026 brackets.
- ▸The Advanced tab adds depreciation recapture, the 3.8% net investment income tax, state tax, and a sell versus exchange comparison.
- ▸On a typical commercial property sale, those added layers can push the effective rate well above 20%.
How Does This Capital Gains Tax Calculator Work?
In order to know your capital gains tax rate, you first need to understand what tax bracket you're in in the first place. This calculator does that for you. The Easy tab handles a basic purchase and sale. The Advanced tab separates a property gain into recapture, 25% gain, and long term gain, then layers on net investment income tax and state tax. If you're unsure what any of that meant, sticking to the "Easy" calculator will give you a ballpark figure (but remember to always consult your CPA before making investment decisions).
For stocks, funds, or raw land with no depreciation, the Easy tab is generally enough. It needs only five inputs: purchase price, sale price, taxable income, holding period, and filing status.
Investment property, as you may have guessed, is a little bit more complicated. Owners typically claim depreciation each year. That lowers the adjusted basis (the price paid plus improvements, minus depreciation taken). A lower basis means a larger taxable gain, so the Advanced tab allows you to account for both kinds of depreciation separately.
What Are the 2026 Capital Gains Tax Rates?
Gains on assets held one year or less are short term and taxed as ordinary income, at rates from 10% to 37% (and most investors reading this are likely in the 37% category). Gains on assets held longer are long term and taxed at 0%, 15%, or 20%. For 2026, the 20% rate starts above $613,700 of taxable income for joint filers and $545,500 for single filers.
Those thresholds come from the IRS inflation adjustments in Rev. Proc. 2025-32. The 0% band runs up to $98,900 for joint filers and $49,450 for single filers.
How long you've held the asset is the most important figure in determining what your tax rate is. The IRS treats a gain as long term only when the asset was held for more than one year. Selling a few weeks early can move a gain from the 15% band into a 24% or 32% bracket. The very first thing you should do is figure out how long you've held on to the asset.
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How Is Depreciation Recapture Taxed When Property Sells?
One of the best things about commercial real estate is depreciation, which you can use to massively offset your tax bill. At sale, the IRS takes part of that benefit back. Straight line building depreciation (unrecaptured Section 1250 gain) is taxed at up to 25%. Accelerated depreciation on cost segregation components (Section 1245) is generally recaptured at ordinary income rates.
This split matters for anyone who did a cost segregation study. Bonus depreciation can create large deductions up front, as we cover in our guide to 100% bonus depreciation for NNN investors. At sale, however, that same amount may be taxed at 32% or more rather than 20%.
Many simple tools apply one flat rate to the whole gain. That can make the bill look smaller than it is, so the Advanced tab keeps each type in its own row.
Worked Example: Selling an NNN Property in 2026
Illustrative scenario:
Consider a married couple filing jointly with $300,000 of other taxable income. They bought a single tenant NNN property for $2,000,000 and are selling it for $3,000,000 with $90,000 in selling costs. Over the years, they claimed $300,000 of straight line depreciation and $200,000 of bonus depreciation from a cost segregation study.
Their adjusted basis falls to $1,500,000, so the total gain is $1,410,000. The calculator then splits it into three slices and adds the surtax:
$200,000 of Section 1245 recapture at ordinary rates: about $55,716
$300,000 of unrecaptured Section 1250 gain at 25%: $75,000
$910,000 of long term gain at 20%: $182,000
The 3.8% net investment income tax: $53,580
In Florida, the estimated total comes to $366,296, an effective rate near 26%. After a $1,200,000 loan payoff, net equity lands around $1,343,704.
State tax adds another layer. Using the Tax Foundation's 2026 state rates, the same sale in California would add roughly $187,530 at the 13.3% top rate. That brings the effective rate close to 39%.
Run Your Numbers With Our Team →
Paying the Tax vs. Deferring It With a 1031 Exchange
Paying the tax and moving on has genuine appeal. It is simple, it ends the story, and the cash is free to use. For an investor who wants cash or plans to leave real estate, selling outright may be the right call.
On the other hand, a 1031 exchange lets an investor defer both capital gains tax and depreciation recapture by reinvesting into like kind property. In our example, a full deferral keeps $1,710,000 of equity working instead of $1,343,704. That is about 27% more capital to reinvest.
The rules are strict, including a 45 day identification window. That is why many investors choose NNN properties as 1031 replacement property, since they tend to offer stable income with low landlord responsibilities. Custom Capital has closed more than 130 deals totaling $470M+ in acquisitions, with 100% direct ownership for each investor.
Final Thoughts: Use the Calculator as a Starting Point
A capital gains tax calculator works best as a first look, not a final answer. The 2026 rates, recapture rules, and state taxes can stack in ways a flat rate misses. Run both tabs, compare the sell and exchange results, and then review the numbers with a CPA.
If a sale is on the horizon, we're happy to walk through the replacement options before you list. Schedule a call with our team.
Talk Through a Sale Before You List
Our team can walk through 1031 options, timing, and financing so your equity keeps working after the sale.
Custom Capital does not give tax or legal advice. Please check with your CPA.
Frequently Asked Questions
How accurate is this capital gains tax calculator?
The calculator uses the official 2026 federal brackets and thresholds from IRS Rev. Proc. 2025-32. It still simplifies some items, such as using taxable income as a stand in for MAGI and applying a flat state rate, so treat results as estimates.
What is the long term capital gains rate for 2026?
Long term gains are taxed at 0%, 15%, or 20%, depending on taxable income. For joint filers in 2026, the 15% rate applies from $98,900 to $613,700, and 20% applies above that.
Is depreciation recapture always taxed at 25%?
No. Straight line building depreciation is taxed at a maximum of 25%. Accelerated depreciation on Section 1245 components, such as those from a cost segregation study, is generally taxed at ordinary income rates.
Does the 3.8% NIIT apply to a rental property sale?
It often does. The IRS includes rental income and capital gains in net investment income, and the tax applies above $250,000 of MAGI for joint filers and $200,000 for single filers. Qualifying real estate professionals may be exempt.
Can a 1031 exchange eliminate capital gains tax?
A 1031 exchange defers tax rather than eliminating it. The deferred gain carries into the replacement property, although heirs may receive a stepped up basis that can remove the deferred gain at death.
This page and its calculator are for education only and are not tax, legal, or investment advice. Results are estimates based on 2026 rates and a few simple assumptions. Please talk with a tax pro before you act.
