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Form 4797 Calculator

Work out the gain on selling rental or business property on Form 4797, split into recapture and section 1231 gain.

Updated November 4, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

Form 4797 sale and recapture calculator

Sale price ($)Selling expenses ($)Original cost plus improvements ($)Depreciation allowed or allowable ($)Property typeYour ordinary tax rate (%)Your long-term gain rate (%)

Estimated federal tax on the sale

–

–Total gain

–Adjusted basis

–Ordinary income (1245 recapture)

–Unrecaptured 1250 gain (max 25%)

–Section 1231 gain (capital rates)

When you use Form 4797

Form 4797 reports sales of property used in a business or held for rent: rental houses, commercial buildings, equipment and vehicles. Property held more than a year is section 1231 property: net gains get long-term capital gains rates, but net losses are fully deductible as ordinary losses.

Depreciation recapture

Adjusted basis = cost + improvements − depreciation "allowed or allowable" (even depreciation you didn't claim).
Section 1245 property (equipment, vehicles, furniture, cost-segregated components): gain up to the depreciation taken is ordinary income (Part III).
Section 1250 real property (buildings depreciated straight-line): gain up to the depreciation is unrecaptured section 1250 gain, taxed at no more than 25%; the rest of the gain is section 1231 gain at 0/15/20%.

Worked example

A rental bought for $340,000 (including improvements) with $98,900 of depreciation sells for $450,000 with $27,000 of selling costs. Adjusted basis is $241,100 and the gain is $181,900: $98,900 is unrecaptured 1250 gain (at 24% here, under the 25% cap) and $83,000 is section 1231 gain at 15%. Rental depreciation itself: rental property depreciation calculator; a 1031 exchange into another investment property can defer the tax (see the capital gains tax calculator for the rates). Investment income may also owe the 3.8% NIIT.

Common questions

What is Form 4797?

The form for sales of business and rental property.

How is depreciation recapture taxed on a rental?

As unrecaptured section 1250 gain at up to 25%.

Are section 1231 losses deductible?

Yes, net section 1231 losses are ordinary losses.

Sources

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General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.