California Capital Gains Tax Calculator: Home and Rental Property Sales
Enter your sale price, cost basis and any depreciation to see the full tax on a California sale: state tax at 1% to 13.3% (no long-term discount), federal 0/15/20%, the 3.8% net investment income tax, and up to 25% on depreciation from a rental. It runs in your browser.
By Hans Goldstein, EA, Tax & Exit Planning · Updated
Admitted to practice before the IRS.
What is the tax bill on your property sale going to be?
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Illustrative only, not tax advice. Bring the numbers to your CPA, or send them the §453 guide built for accountants.
Find out what your property sale tax bill actually is, and what you can do about it
No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
Find out what your tax bill actually looks like before you sell, including the parts your CPA may not raise until the return is already being prepared.
Most people find out what they owe after the sale closes, when nothing can be changed. A short conversation now tells you the number, which layers apply to your situation, and which options are still open while the sale is still in front of you.
- What you will actually owe: federal, the 3.8% surtax, recapture and your state
- Which of those layers you can still do something about
- Whether spreading the sale changes the number in your case
Hans Goldstein · 213-414-2808 · Hans Goldstein: Tax & Exit Planning · This is an educational conversation, not tax advice. Bring your CPA in before you file.
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
What the calculator is applying
California: up to 13.3%. The top bracket is 12.3%, plus the 1% Mental Health Services Tax on taxable income above $1 million. California does not distinguish long-term from short-term gains. Everything is ordinary income at the state level.
Federal: 0%, 15% or 20% on long-term gains, depending on total taxable income.
Net investment income tax: 3.8% above $200,000 single or $250,000 married filing jointly.
Depreciation recapture: up to 25% on unrecaptured §1250 gain. Every dollar you depreciated on a building comes back at ordinary rates capped at 25%, and on a sale this size that is usually the full 25%. This is the line that surprises people most, and on a long-held rental it is often the largest single component. See the depreciation recapture calculator.
A top-bracket California seller lands around 37.1% all in. On a $2 million gain that is roughly $742,000 in one tax year.
The part the calculator is really for
Look at the tabs. The first shows what you pay at closing. The others show what happens if you do not take the whole check in one year.
Because California taxes gain as ordinary income, spreading a sale across multiple tax years does more here than in almost any other state. You are deferring, and you are also moving dollars out of the 13.3% band into lower ones. A §453 structured installment sale does exactly that, and the payments come from an assignment company funded by a fixed annuity from a highly rated life insurer, rather than invested at market risk.
Common California situations
- Selling a rental you have held 20 years. Recapture usually hurts more than the gain. Run it with your building value filled in. See avoiding capital gains on California rental property.
- Leaving California before you sell. Moving does not automatically escape California tax on California-source real property, and the FTB is active on residency. See avoiding California capital gains tax by moving.
- Selling a business. Allocation between goodwill, equipment and real property changes the answer materially. See sell a business.
Illustrative only, not tax advice. Bring the numbers to your CPA, or send them the §453 guide built for accountants.
Capital gains tax calculator for the sale of a rental property
Selling a rental adds a layer a home sale does not have: depreciation recapture. The calculator handles it in this order:
- Adjusted basis = purchase price + improvements − the depreciation you took (or were allowed to take, whether or not you claimed it).
- Gain = sale price − selling costs − adjusted basis.
- The part of the gain equal to depreciation on the building is unrecaptured §1250 gain, taxed federally at up to 25%.
- Depreciation on appliances, fixtures and anything a cost segregation study reclassified is §1245 recapture, taxed as ordinary income.
- The rest is long-term capital gain at 0%, 15% or 20%.
- The 3.8% NIIT generally applies to rental gain unless you qualify as a real estate professional.
- California taxes the entire gain, depreciation portion included, as ordinary income.
The home-sale exclusion ($250,000 single, $500,000 married) does not apply to a property you never lived in, which is why a long-held rental often owes more than the owner expects. Enter your building's depreciation in the calculator above to see your version, or run the depreciation recapture calculator for the recapture line alone. See also avoiding capital gains on California rental property.
Frequently asked
Q: How do I calculate capital gains tax on the sale of a rental property? A: Subtract your adjusted basis (purchase price plus improvements, minus depreciation allowed or allowable) and selling costs from the sale price. The part of the gain equal to building depreciation is taxed at up to 25% federally, the rest at 0/15/20%, plus the 3.8% NIIT for most landlords and state tax. In California the whole gain is taxed as ordinary income at up to 13.3%.
Q: What is the capital gains tax rate in California? A: California taxes capital gains as ordinary income at 1% to 12.3%, plus 1% on taxable income over $1 million, for a 13.3% top rate. There is no separate long-term rate. See the full California capital gains tax rate brackets.
Q: Is this calculator accurate for a large sale? A: It layers federal capital gains rates, the NIIT, depreciation recapture and California tax, which is what drives a large sale. It does not see your full return (AMT, deductions, loss carryforwards, credits), so treat the result as an estimate to review with your CPA.
Q: Can I lower the tax on a California rental sale? A: A 1031 exchange defers everything if you buy more real estate. An installment sale under IRC §453 spreads the capital gain and the unrecaptured §1250 gain over the years you are paid, which can keep more of it out of California's top brackets. Section 1245 recapture is taxed in the year of sale either way.
Sources: FTB 2026 tax rate schedules (FTB Tax News, October 2026), IRS Rev. Proc. 2025-32, IRS Publication 544, IRS Topic 409.
Find out what your property sale tax bill actually is, and what you can do about it
No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
Find out what your tax bill actually looks like before you sell, including the parts your CPA may not raise until the return is already being prepared.
Most people find out what they owe after the sale closes, when nothing can be changed. A short conversation now tells you the number, which layers apply to your situation, and which options are still open while the sale is still in front of you.
- What you will actually owe: federal, the 3.8% surtax, recapture and your state
- Which of those layers you can still do something about
- Whether spreading the sale changes the number in your case
Hans Goldstein · 213-414-2808 · Hans Goldstein: Tax & Exit Planning · This is an educational conversation, not tax advice. Bring your CPA in before you file.
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Run your specific numbers
The calculator runs your sale through real 2026 federal + state tax brackets and shows §453 savings vs lump sum side-by-side.
Run the calculator → 213-414-2808The rates this calculator applies (2026)
Federal and California layers on a 2026 sale
| Layer | Rate | When it applies |
|---|---|---|
| Federal long-term capital gain | 0% / 15% / 20% | 0% to $98,900 joint taxable income, 15% to $613,700, 20% above ($49,450 / $545,500 single) |
| Unrecaptured §1250 gain | Up to 25% | Straight-line depreciation taken on a building |
| Net investment income tax | 3.8% | Modified AGI above $250,000 joint / $200,000 single |
| California income tax | 1% to 12.3% | All gains taxed as ordinary income, no long-term rate |
| California Mental Health Services Tax | 1% | Taxable income above $1 million (13.3% top rate) |
Sources: IRS Rev. Proc. 2025-32 (2026 federal thresholds), 26 U.S.C. §1(h) and §1411, California FTB (capital gains and Mental Health Services Tax), checked October 3, 2026.
People also ask
How do I calculate my California capital gains tax?
Subtract your adjusted basis (purchase price plus improvements minus depreciation) and selling costs from the sale price to get the gain. California adds the whole gain to your other income and taxes it at its ordinary rates, 1% to 12.3%, plus 1% on taxable income over $1 million. There is no lower long-term rate. Federal tax is figured separately.
How much capital gains tax will I pay on $300,000?
Federally, most sellers pay 15%, about $45,000, rising to 20% on income above $613,700 joint ($545,500 single) in 2026, plus 3.8% NIIT on modified AGI above $250,000 joint. California taxes the full $300,000 at your ordinary rate, which for many sellers is 9.3% or more. Depreciation on a rental is taxed federally at up to 25%.
How much is capital gains tax on the sale of a home in California?
First take the §121 exclusion: up to $250,000 of gain single or $500,000 married filing jointly is tax-free if you owned and lived in the home 2 of the last 5 years. California follows that exclusion. Gain above it is taxed federally at 0%, 15% or 20% plus NIIT, and by California as ordinary income.
Is capital gains tax 15% or 20%?
Both, depending on income. For 2026, long-term gains are taxed at 0% up to $98,900 of joint taxable income ($49,450 single), 15% up to $613,700 joint ($545,500 single), and 20% above that. The 3.8% NIIT can apply on top, and depreciation on real estate is taxed at up to 25%.
Related
- Can moving avoid California tax?
- California rental property capital gains
- Capital gains tax by state
- Structured installment sale calculator
Sources: IRS Rev. Proc. 2025-32; California FTB: capital gains and losses; IRS Topic 701, Sale of your home. Checked October 3, 2026.