Are you thinking about selling your investment property?
Before you close the deal—pause. There could be a smarter, more strategic move.
By using a 1031 Exchange, you may be able to defer capital gains taxes by rolling proceeds into another investment property. That means more of your equity keeps working for you.
But first, here’s what you need to know:
How to Calculate Capital Gains on Investment Property
It’s not as complicated as it seems—but it is detailed. Here’s the breakdown:
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Adjusted Basis: Start with what you paid for the property. Then, add in any improvements you’ve made and other tax-approved adjustments.
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Sale Price: What did you net after closing costs, commissions, and sale expenses?
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Realized Gain: Subtract your adjusted basis from the sale price. That’s your gain.
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Depreciation Recapture: If you claimed depreciation during ownership, that portion gets taxed—typically at 25%.
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Capital Gains Tax: Depending on your income, the federal tax rate could be 0%, 15%, or 20%.
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Net Investment Income Tax (NIIT): High earners may pay an extra 3.8% on investment income.
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State Taxes: California? Expect income tax on your gain (often around 12.3%). Texas? No state income tax. But either way, a state filing may still be required.
Sound like a lot? It is. But you don’t have to navigate it alone.
Let County Properties Connect You with a Trusted Exchange Expert
At County Properties, we don’t just sell real estate—we guide investors. When you’re ready for a 1031 Exchange, we can connect you directly with a preferred exchange expert who understands the ins and outs of tax deferral.
Why It Matters
The market shifts. Rules change. Deadlines sneak up. But a good exchange partner makes all the difference.
And we’re here to make sure you don’t just sell smart—you reinvest smarter.
Contact County Properties and let us help you align with the right Exchange and Tax professional, Escrow Institute of California