Southern Utah Seller Tools

Will I actually owe capital gains?

Most Southern Utah primary residences sell completely tax-free thanks to the Section 121 exclusion. Plug in your numbers and find out where you stand before you list.

$250K / $500K exclusion Federal LTCG brackets Utah 4.45% flat Stepped-up basis

Tax year 2026, rates updated 2026-05-16

Section 121, 2026 federal brackets, Utah SB60 flat rate, and NIIT all baked in.

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Capital Gains Estimator

Enter your numbers

What kind of home are you selling?

Most Southern Utah primary residences sell completely tax-free. The $250,000 / $500,000 Section 121 exclusion covers the full gain for most sellers. The calculator checks whether you qualify and shows exposure on any gain above the limit.

Sale Price & Cost Basis

Estimated Sale Price

What you expect the home to sell for.

Original Purchase Price

What you paid when you originally bought it, closing costs included.

Fair Market Value at Date of Death This is your stepped-up basis under IRC Section 1014. The home's basis resets to its value on the date the previous owner died, which usually eliminates or dramatically reduces capital gains.

Get this from an appraisal at date of death or a CPA's analysis.

Year You Purchased Year You Inherited

Reference only. Tax math uses the dollar inputs.

Capital Improvements (optional) Room additions, new roof, kitchen remodel, finished basement, central air, landscaping, fencing. NOT regular repairs or maintenance.

Receipts help. Better to be conservative than to inflate.

Filing Status & Income

Filing Status

MFJ doubles the Section 121 exclusion to $500,000.

Estimated AGI (excluding this sale) Your adjusted gross income from wages, business, and other sources. Determines which federal LTCG bracket applies to any taxable portion of gain.

From your most recent tax return, line 11 of Form 1040.

Section 121 Ownership & Use Tests

Total Years You Have Owned the Home

Need 2 years minimum for the full exclusion.

Years Lived In as Primary (last 5) 5 yr

Need 2 of last 5 years lived in as your main home.

Depreciation (Rental or Home Office)

Total Depreciation Claimed Total depreciation you deducted on Schedule E during the rental years. This amount is "recaptured" at up to 25% federal rate, separate from regular capital gains rates.

Leave at zero if you never rented or claimed a home office.

Selling Costs & Payoff

Selling Costs (optional)

Commission, title, escrow, concessions. Default 7.5%. Or use my seller net sheet for a precise number.

Mortgage Payoff (optional)

Add this to see estimated cash to you after tax and payoff.

Your Estimated Capital Gains Tax

federal plus Utah

Estimate based on Section 121, 2026 federal brackets, NIIT thresholds, and Utah's 4.45% flat rate.

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Section 121 Eligibility

Ownership test

Owned the home for at least 2 of the last 5 years.

Use test

Lived in the home as primary residence for at least 2 of the last 5 years.

Partial exclusion may apply. If you fell short due to a job change of 50+ miles, a health issue, or unforeseen circumstances like divorce or multiple births, the IRS allows a prorated exclusion. This is a CPA conversation.

Estimated Cash to You

Sale price minus selling costs, capital gains tax, and mortgage payoff.

Heads up

Line-by-line breakdown

Gain Calculation

Sale Price

Gross proceeds before costs

Selling Costs

7.5% default

Adjusted Basis

Purchase price plus improvements

Realized Gain

Sale price minus costs minus basis

Exclusions & Recapture

Section 121 Exclusion Applied

$500,000 cap for MFJ

Depreciation Recapture Base

Taxed separately at up to 25% federal

Taxable Gain Remaining

What gets taxed at LTCG rates

Tax Owed

Federal Long-Term Capital Gains

Primary bracket: 15%

Depreciation Recapture (25%)

Section 1250 unrecaptured gain

Net Investment Income Tax (3.8%)

Applies above MAGI threshold

Utah State Tax (4.45%)

SB60 flat rate, tax year 2026

Total Estimated Tax

Federal plus Utah, all components

Most Sellers Owe Nothing

What you actually walk away with matters more than the tax line.

Capital gains is one piece. To know your real after-tax number, you need a current sale price plus your specific costs. I will run a free, no-obligation valuation on your home.

Get My Home Value Try the seller net sheet

Under the Hood

How capital gains on a home sale actually work

Four moving parts, plus a fifth that catches a lot of people off guard. Here is the short version.

Section 121 Exclusion

The big one. Excludes up to $250,000 single, $500,000 MFJ of gain on your primary residence if you owned and lived there for at least 2 of the last 5 years. Hasn't been adjusted for inflation since 1997, so long-time Southern Utah owners with big appreciation should run the math.

Federal LTCG Brackets

If gain exceeds your exclusion, what remains is taxed at 0%, 15%, or 20% federally based on your taxable income and filing status. For 2026, the 15% bracket reaches $613,700 MFJ. Most middle-income sellers land at 0% or 15% on any taxable portion.

Utah State Tax

Utah doesn't have a preferential capital gains rate. All gains are taxed as ordinary income at the state's flat rate, which dropped to 4.45% for tax year 2026 under Senate Bill 60. The good news: gain excluded under Section 121 isn't part of your federal AGI, so it isn't taxed at the state level either.

Depreciation Recapture

The surprise line. If you ever rented the home or claimed a home office deduction, the depreciation you deducted is "recaptured" at up to 25% federal rate when you sell. Section 121 doesn't shield this. Common for sellers who rented a home before listing it.

Net Investment Income Tax (NIIT)

A 3.8% surtax that applies if your modified AGI exceeds $200,000 single or $250,000 MFJ. Importantly, gain excluded under Section 121 is NOT subject to NIIT. Only the taxable portion of gain counts. Most primary residence sellers, even high earners, owe no NIIT on their home sale.

Assumptions & Sources

What this calculator uses

Section 121 exclusion

$250,000 single / $500,000 MFJ. Ownership and use tests: 2 of last 5 years. Source: 26 USC 121, IRS Publication 523.

Federal LTCG brackets

2026 inflation-adjusted brackets from IRS Rev. Proc. 2025-32: 0% to $98,900 MFJ, 15% to $613,700 MFJ, 20% above.

Utah state rate

4.45% flat for tax year 2026 (SB60). Capital gains taxed as ordinary income.

Net Investment Income Tax

3.8% surtax above $200K single / $250K MFJ MAGI. Section 121 excluded gain is not subject.

Depreciation recapture

Section 1250 unrecaptured gain taxed at maximum 25% federal rate. Cannot be excluded under Section 121.

Stepped-up basis

Inherited property basis resets to fair market value at date of death under IRC Section 1014.

Selling costs default

7.5% of sale price unless you enter a specific dollar amount. Use the seller net sheet for precision.

Not tax advice

Estimate only. Always consult a CPA or tax attorney before listing if you suspect capital gains exposure.

Common Questions

Capital gains FAQ

The questions Cedar City and St. George sellers ask most often.

Do I owe capital gains tax when I sell my primary residence in Utah?

Most likely no. The IRS Section 121 exclusion lets you exclude up to $250,000 of gain if filing single, $500,000 if married filing jointly. You must have owned and lived in the home for at least 2 of the last 5 years. Since 1997, those exclusion amounts have not been adjusted for inflation, so long-time owners in St. George or Cedar City with major appreciation should still check the math.

Does Utah have its own capital gains tax?

Utah does not have a separate capital gains rate. It taxes all capital gains as ordinary income at the state's flat rate, which is 4.45% for tax year 2026 under Senate Bill 60. There is no preferential long-term rate at the state level. However, gain that is excluded under the federal Section 121 exclusion is also not included in Utah taxable income, so most primary residence sellers owe no Utah tax either.

What is the stepped-up basis on an inherited home?

When you inherit a home, your basis resets to the fair market value on the date of death of the previous owner, under IRC Section 1014. This is called a stepped-up basis. It usually eliminates or dramatically reduces capital gains tax if you sell soon after inheriting, because you only owe tax on appreciation since the date of death, not the original owner's lifetime gain. Section 121 generally does not apply to inherited homes unless you later use the home as your own primary residence.

What is depreciation recapture and when does it apply?

If you used your home as a rental or claimed a home office deduction, the depreciation you deducted reduces your basis. When you sell, that depreciation is recaptured and taxed at a maximum 25% federal rate, separate from regular long-term capital gains rates. Depreciation recapture cannot be excluded under Section 121, even on a former primary residence. This is a common surprise for sellers who rented out a home before listing it.

Does the 3.8% Net Investment Income Tax apply to my home sale?

The Net Investment Income Tax (NIIT) is a 3.8% surtax that applies if your modified adjusted gross income exceeds $200,000 single or $250,000 married filing jointly. Importantly, gain excluded under Section 121 is NOT subject to NIIT. Only the taxable portion of capital gain counts. So most primary residence sellers, even high earners, owe no NIIT on their home sale.

Is this calculator a substitute for tax advice from a CPA?

No. This is an educational estimate. Tax law is complex, individual situations vary, and the IRS rules around partial exclusions, nonqualified use, depreciation recapture, and 1031 exchanges require professional judgment. I am a licensed real estate agent and mortgage lender, not a CPA. Always consult a tax professional before making a decision based on capital gains exposure. For the authoritative source, see IRS Publication 523.

Scott Buehler, Southern Utah REALTOR and mortgage lender

Listing & Lending in Southern Utah

The next step

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