Selling Your Rental: Depreciation Recapture
Know the tax before you sign the sale.The gain on a rental sale is not one number at one rate — the depreciation you deducted comes back first, the building’s share is capped at 25%, cost-segregated property is recaptured as ordinary income, the rest is long-term capital gain, and a 3.8% surtax can ride on top. This Blueprint walks the full split on a realistic $560,000 sale, shows how suspended passive losses offset the gain, and lays out the 1031 exchange and installment-sale routes that change the bill — and it comes with an Excel tool that runs your own numbers and compares selling against an exchange.WHO THIS IS FOR· Owners selling a rental property and bracing for the tax bill· Investors who ran a cost-segregation study and want to know what it costs at sale· Sellers weighing a 1031 exchange against an outright sale or installment sale· Higher-income landlords who have heard about depreciation recapture and the 3.8% surtax but never seen the mathWHAT'S INSIDEThe ebook — a 26-page, plain-English Blueprint (2026 edition) with six strategies:· Anatomy of the sale — amount realized, adjusted basis, and the total gain you are taxed on· The depreciation you took comes back — unrecaptured Section 1250 gain, taxed at a 25% ceiling· Cost-seg’s bill comes due — Section 1245 ordinary recapture on 5, 7, and 15-year property· The rest is capital gain plus NIIT — long-term gain at 0/15/20% and the 3.8% surtax· Suspended passive losses freed at sale — how carried-forward losses offset the gain· Deferral routes — the 1031 exchange and installment sale, and how recapture behaves in eachThe Excel tool — Sale Gain & Recapture Calculator. Enter your sale price, selling costs, basis, depreciation (including the cost-seg portion), tax rates, and suspended losses, and it computes amount realized, adjusted basis, total gain, the full gain split with tax on each piece, the 3.8% NIIT, your net after-tax proceeds, and a side-by-side of selling outright versus a 1031 exchange — all on the 2026 figures cited in the book.WHAT YOU'LL WALK AWAY ABLE TO DO· Compute amount realized, adjusted basis, and total gain on your own sale· Split the gain into its Section 1245, unrecaptured 1250, and long-term capital-gain pieces· Apply the right rate to each piece, including the 25% ceiling and the 3.8% surtax· Use your suspended passive losses to offset the gain in the year of sale· Compare an outright sale against a 1031 exchange before you commitFORMAT & DELIVERYInstant download. PDF ebook + Excel tool (.xlsx). Lifetime access and free updates.SAVE MORE WITH THE PACKThis title is part of the Real Estate Investor Pack — bundled at a steep discount ($449). Or get every Tax Confident guide with the All-Access Pass ($699).FAQIs this current? Yes — it uses 2026 figures, including the 25% ceiling on unrecaptured Section 1250 gain, ordinary recapture on cost-segregated property, the 0/15/20% capital-gain rates, and the 3.8% NIIT at $200k single / $250k MFJ. Confirm the current-year bracket breakpoints before you file.Do I need special software? Any spreadsheet app that opens .xlsx (Excel, Google Sheets, Numbers). Just fill in the light-blue cells.Is this tax advice? No. It is educational and makes you a sharp, informed seller. It does not replace your own preparer or a qualified intermediary for a 1031 exchange.I am considering a 1031 exchange — is this still useful? Yes. It shows you exactly what the exchange defers versus an outright sale, so you can see the tax at stake before you engage an intermediary.Refunds? If it is not what you expected, reach out at hello@taxconfident.co. Disclaimer: This product is for educational purposes only and does not constitute tax, legal, or financial advice. Tax rules and thresholds change — consult a qualified tax professional regarding your specific situation.taxconfident.gumroad.com · hello@taxconfident.co
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