How much tax do you pay when you sell your rental house in California?
Sarah Duran
Published Mar 30, 2026
depending on your income. California has no long term capital gains rates and no depreciation recapture. The gain will be taxed at “ordinary income” rates which can range from 1% up to 12.3%.
Do you have to pay tax when you sell a house in California?
If your gain exceeds your exclusion amount, you have taxable income. File the following forms with your return: Federal Capital Gains and Losses, Schedule D (IRS Form 1040 or 1040-SR) California Capital Gain or Loss (Schedule D 540) (If there are differences between federal and state taxable amounts)
What kind of taxes do you pay when you sell a rental property in California?
And there you have it, all four taxes you pay on the sale of a rental property in California: federal capital gain and depreciation recapture as well as California capital gain and depreciation recapture. Taxes are not the only expenses you will have to deal with when you sell your rental property.
Do you have to pay taxes on capital gains when you sell a house in California?
The amount you gained between the time you bought the property and the time you sold it is your capital gain. The IRS charges you a tax on your capital gains and so does the state of California through the Franchise Tax Board, also known as the FTB.
How are capital gains taxed on rental property?
Short-term capital gains on a property you have owned for less than a year are taxed like ordinary income at both the federal and state levels. If you own the investment property for more than a year, the long-term federal capital gains tax can be 0%, 15%, or 20%, depending on your income bracket.
Do you pay California tax on property sell-Intuit?
I just chatted with the California Tax Board on their Website and this is a paste of my chat. From what they say, there are no exemptions on any gain received on the sell of residential property–it is all taxed as ordinary income in the state of California. Please read and give me your feedback.Chat from California State Tax Website
