The Capital Gains Tax Calculator estimates potential taxes for a taxable sale (compared to a 1031 exchange). This simplified tool is for illustration only. Tax calculations vary by individual, so consult your tax or financial professional for personalized guidance. AEI does not guarantee the accuracy of this estimator.
Hypothetical Taxpayer 1
Is subject to a 15% tax capital gain, 25% tax on depreciation recapture, state tax, and 0% NII tax
Hypothetical Taxpayer 2
Is subject to a 20% tax capital gain, 25% tax on depreciation recapture, state tax and 3.8% NII tax
The capital gains tax rate increases from 15% to 20% when “Taxable Income” exceeds $533,400 for single filers or $600,050 for married couples filing jointly (2025 limits).
Net Investment Income (NII) tax applies when a taxpayer’s “Adjusted Gross Income” exceeds $200,000 for single filers or $250,000 for married couples filing jointly.
View: State tax rates
Does the Net Investment Income (NII) Tax apply to you?
Since January 1, 2013, individuals with investment income may owe a 3.8% NII Tax on the lesser of their net investment income or the amount by which their modified adjusted gross income (MAGI) exceeds these thresholds:
• Married filing jointly: $250,000
• Married filing separately: $125,000
• Single or head of household: $200,000
• Qualifying widow(er) with a child: $250,000
Net investment income typically includes, but is not limited to, interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. However, it generally does not include wages, unemployment compensation, Social Security benefits, alimony, or most types of self-employment income.
Moreover, any gain from the sale of a personal residence that is excluded from gross income for regular income tax purposes is also excluded from net investment income. This means such gains are not subject to the Net Investment Income Tax.
Individuals who owe the Net Investment Income Tax must file Form 8960, which includes instructions on calculating the amount of investment income subject to the tax.
Additionally, if an individual has insufficient withholding or does not make adequate quarterly estimated tax payments to cover the Net Investment Income Tax, they may face a penalty for underpayment of estimated taxes.
This Capital Gains Tax Calculator is intended solely as an educational resource and a tool for informal planning. The results generated by this calculator do not constitute tax or legal advice. It is important not to rely on this or any other calculator on aeifunds.com when attempting to comply with IRS regulations. When conducting a 1031 exchange, you should consult with your attorney, CPA, accommodator, and other tax and financial professionals for proper guidance.
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