Area 1031 Exchanges for Real Estate Traders When an investor markets real estate, a capital gains tax is acknowledged, together with a tax on deprecation recapture. The regular funding gains tax, deprecation recapture, and also any kind of applicable state tax obligation can typically cause a tax liability in the 20% to 25% range for the sale of realty. (If the property has actually been held for less than one year, every one of the gain will certainly be exhausted at much higher short-term funding gains rates.).