I sold a rental property in February 2025, I will owe capital gains tax on this sale. When is the capital gains tax due? When I submit my tax return in March 2026 with the capital gains tax calculations? Or is the capital gains tax due earlier than that?

[AnnetteB6 · Accepted solution]

The sale of the rental property will be reported as part of your 2025 tax return and any taxes you owe will be included as part of that return that you will file in 2026.  

Depending on how much the sale of the property and the taxes on that sale impact the rest of your return, you may have needed to make estimated payments during 2025 to cover the capital gains tax from the sale of the property.  The income tax system is set up to be a 'pay as you go' system.  This means that when a large or unusual transaction occurs during the year that does not have tax withholdings then you are expected to make an estimated payment to cover the taxes.

When your return is finished and filed, you may see a penalty for underpayment of tax added to the final balance due or subtracted from your refund.  It is too late at this point to fix it.  

To learn more, take a look at the following TurboTax help article and information from the IRS:

Estimated Taxes: How to Determine What to Pay and When

Underpayment of estimated tax by individuals penalty