What Percent of Taxes Do You Pay for Selling Real Estate?

The amount of tax you pay when you sell real estate varies depending on how much money you make when you sell the property. Properties that are sold at a loss are subject to few, if any taxes. Profitable sales, though, can be subject to many different taxes, including capital gains tax, depreciation recapture and state income tax. These taxes apply whether you sell an investment property that you are in the business of renting out or when you sell a property that your business owns and uses in its trade.

Properties that you sell at a profit will be subject to federal capital gains tax. To calculate your profit, subtract your closing costs and commissions from your selling price to find your sale basis. To find your adjusted cost basis, add up what you originally paid for the property, your closing costs at the time of purchase, and the cost of any improvements that you've made to the property. You pay tax on the profit that is left after subtracting your adjusted cost basis from your sale basis. As long as you've held the property for at least one year, the federal capital gains rate in effect as of 2013 was 15 percent. If your adjusted gross income is over $250,000 if you are married or $200,000 if you are single, you will pay an additional 3.8 percent Medicare surtax. Taxpayers with incomes over $450,000 if married or $400,000 if single are subject to a 20 percent capital gains tax rate instead of the 15 percent rate. Corporations, on the other hand, don't get a special capital gains rate. They pay their regular corporate income tax rate on their corporate gains.

To calculate your depreciated basis, subtract all of the depreciation that you claimed on the building and its improvements from the adjusted cost basis. If you sold the property for more than the depreciated basis, you will owe a 25 percent depreciation recapture tax on your accumulated depreciation. The tax is due on the difference between your depreciated basis and your adjusted cost basis or the difference between your depreciated basis and your sale basis, whichever is less.

Arizona also levies a state income tax on your capital gains and depreciation recapture. As of 2013, Arizona's state income tax rates vary from 2.59 to 4.54 percent. However, Arizona is also phasing in a lower capital gains tax which will take the rate on capital gains down from 4.54 percent to 3.4 percent starting in the 2016 tax year. Other state income taxes vary from zero in states like Nevada and South Dakota to rates as high as California's 12.3 percent and New Jersey's 8.97 percent. Corporate income taxes vary from 0 percent in Nevada to Iowa's highest rate of 12.5 percent, with Arizona having a flat rate of 6.968 percent in 2013, decreasing to 6.5 percent in 2014.

As of 2013, Arizona charges a very minimal transfer tax of $2 for every deed or land contract that changes hands, but only 13 states, including Arizona, have minimal or no transfer taxes. Transfer taxes elsewhere vary greatly. Colorado's tax is just 0.01 percent, Nevada's is 0.26 percent, and Delaware charges anywhere from 1.5 to 2 percent. Many low-tax states also have movements to increase transfer taxes. Some states also tax commercial properties differently from residential properties and tax higher value properties at higher rates than less expensive ones.