Capital gains deferral calculator

What the tax on a real estate sale costs if you pay it now, and what a Qualified Opportunity Fund, a §1031 exchange or an installment sale changes: federal 0/15/20%, 25% unrecaptured §1250, §1245 recapture, 3.8% NIIT and state, year by year to your horizon. IRC §§1(h), 1411, 1400Z-2, 1031, 453; Rev. Proc. 2025-32

The sale

Sale price

Adjusted basis

Cost plus improvements, minus depreciation. Closing date Total depreciation taken

Straight-line on the building is unrecaptured §1250 gain (max 25%). Of which §1245 property

Cost-segregated components, equipment: ordinary recapture. Selling costs

Loan payoff at closing

You

Filing status Taxable income before the sale

After deductions; sets the brackets the gain stacks on. StateRates on file for CA, NY, NJ, MN, OR, MA; no-tax states; WA. State rate on gains (%)Overrides the rate on file; needed for other states.

Assumptions

Horizon (years)When everything is sold and compared. Growth of reinvested money (% a year) Discount rate for present value (%) Down payment on the next property (%)For the purchasing-power figure. QOF investment dateOptional; defaults to the closing. After Dec 31, 2026 is OZ 2.0. Sell the §1031 replacement at the horizon?

Qualified rural opportunity fund (30% step-up)I will extend my return (1031 exchange period)

Installment terms

Down payment (%) Note term (years) Note interest rate (%)Below the AFR the IRS imputes interest.

What the comparison covers

Federal tax by character: §1245 recapture at ordinary rates, unrecaptured §1250 gain at up to 25%, long-term gain at 0/15/20% stacked on your other income, and the 3.8% NIIT.
State tax from a 2026 rate table (or the rate you enter), including states that do not follow the Opportunity Zone deferral.
Opportunity Fund timing under OZ 2.0 (5-year deferral, 10% or 30% step-up, 10-year exclusion) or OZ 1.0 for 2026 investments.
§1031 with carried-over basis and the 45/180-day deadlines against your return due date.
Installment sale with the gross profit ratio, recapture up front, note interest and the §453A charge above $5 million.

Illustrative only, not tax advice. Federal figures use tax year 2026 (Rev. Proc. 2025-32) for every year; state rates are approximate top marginal rates. Eligibility for each strategy depends on facts the calculator does not check.

What the comparison covers

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