"He is not capable of doing it."
Translation:Er ist nicht in der Lage, es zu tun.
Here's one way of getting it pretty much always right, that actually turns out to be pretty easy when you get your head around it! (I read about it on the blog at yourdailygerman.com)
Nicht always comes directly before what's being negated, as long as you think of the "natural" position of a verb as being at the end of a sentence. That is, when the "nicht" is at the end of the sentence you're "really" negating the conjugated verb that sits in its usual second place. Give that a try on some example sentences and see if it makes as much sense to you as it does to me.
Now that's an interesting conceptual hack! I just think of it as "nicht at the end negates the entire sentence," but this one is kind of cool!
My father once complained bitterly that German is all long, long sentences, where you have to sit and wait for the verb at the very end to find out what they're all about.