Our free online US capital gains calculator when selling residential real-estate property Our United States (US) Real Estate Property Capital Gains Tax calculator is free to use on selling real estate property. This free online tax calculator will help you calculate the tax and allow you to identify cost savings before selling a residential real estate property. Calculating the tax liability ahead of time allows you to plan for the eventual sale of real-estate residential property, how it may be saved, and how it may be paid for. What is real estate capital gains for residential property? Capital gains arise when you sell residential real estate property in the United States. A capital gain that results in a tax liability must be reported in your 1040 tax return to the Internal Revenue Service (IRS) no later than April, 15 unless you have extensions. Please note that making an extension does not mean that you are allowed to delay your tax payment to the IRS. Any tax liabilities must be paid by April, 15 to avoid late payment fees. Use our US tax calculator to help you determine how much money you have to save to pay the Internal Revenue Service (IRS). Reporting property sales to the IRS? Two elements of tax need to be paid to the IRS when you sell residential real estate property. The first is income tax, based on the depreciation previously claimed (or deemed to have been claimed by the IRS). This is known as depreciation recapture. This is because the IRS wishes to claw back any tax advantage you previously had when filing taxes. The income derived from the depreciation recapture is reported. The recapture amount is included on form 4797. The second tax element is capital gains; the difference between the gain and the depreciation is already taken. You will need to use Schedule D of the 1040 tax return for the Capital Gains and Losses. You will also need to use form 8949 for the reporting of sales and other dispositions of Capital Assets when you sell a home. Our tax calculator will do all the hard work for you. It will show how much money you need to pay to the Internal Revenue Service (IRS). Short-term Vs long-term gains If you, as an owner of real estate property, sold within just one year of ownership, the entire gain will be charged at your income tax rates. This would be considered to be a short-term capital gain. Only property owned for more than one year would be subject to Capital Gains Tax rates of 0%, 15% or 20%. This would be considered a long-term capital gain. More on this later, but rest assured it is built into our online tax calculator. For the rest of this article, we will assume that the real estate property has been owned for more than one year. It is always beneficial to hold assets for more than one year to pay less tax to The Internal Revenue Service (IRS). How much tax is charged on the sale of a real estate property investment by the IRS on a 1040 return? From the above example, we had $100,000 of deprecation recapture. This would be charged at your income tax bracket from 0% to 37%, depending on how much you earn in the tax year. How much is tax charged on the sale of a real estate property investment by the IRS on a 1040 return? The Capital Gains Tax may be charged at 0%, 15% or 20%. Again, the amount of capital gains tax you pay depends on how much money you earn. Single-person capital gains tax rates – 0% for earnings below $44,625 – 15% for earnings between $44,626 and $492,300 – 20% for earnings over $492,301 Married joint filing taxpayers’ capital gains tax rates – 0% for earnings below $89,250 – 15% for earnings between $89,251 and $553,850 – 20% for earnings in excess of $553,851 There is another capital gains tax rate of 3.8% investment tax for high earners that needs to be paid to The IRS Home Exclusions Real estate investors that lived in the property may qualify for a home exclusion. The tax relief from living in the property as your main home is covered in section 121 of the Internal Revenue Code. You might qualify for the tax deduction of $250,000 as a single property owner or $500,000 if you owned and lived in the property with your husband, wife or civil partner. To qualify for the home exclusion from the capital gains tax, you must meet the property’s presence and use test. In general, you will benefit from the home exclusion provided that you have owned and lived (used) in the property for two years in the last five-year period before the sale. The above examples show that the gain of $230,000 would be mitigated through the qualifying home exclusions. This means that the property owner would not have to pay any income tax or capital gains tax on the disposal of the real estate property that was lived in for two or more years out of the last five years of ownership. Selling US real estate property You may need to pay HMRC taxes if you are a UK resident and sell US real estate property. There is a tax treaty between the US and the UK to prevent double taxation. You will receive a credit for the US taxes paid to the IRS and pay the remaining tax due to HMRC. Work out how much you need to pay HMRC to sell US real estate property using our free UK Capital Gains Tax Calculator. FAQ What is a US capital gains tax calculator for real estate property sales, and how can it benefit me? A US capital gains tax calculator for real estate helps you estimate the tax you'll owe when selling property. It simplifies complex calculations, making it easier to plan your finances. How do I use a capital gains tax calculator for real estate sales? Input details like the property's purchase and sale prices, holding period, and your income. The calculator will provide an estimate of your capital gains tax liability. re there any exemptions or deductions available when calculating capital gains tax on real estate? Yes, some exemptions and deductions may reduce your taxable gain, such as the primary residence exclusion or capital improvements made to the property. Is a capital gains tax calculator accurate enough for tax planning purposes? While it offers a close estimate, it's essential to consult a tax professional for precise calculations, especially if you have complex financial situations. Are capital gains tax rates the same for all types of real estate property sales? No, tax rates can vary based on factors like your income, holding period, and the type of property (e.g., primary residence or investment property). Always check the current tax laws for accuracy.