Depreciation Recapture Meaning Calculation Tax Rate Example
What is Depreciation Recapture Internal Revenue Code (IRC) sections 1245 and 1250 contain various rules associated with the recaptured depreciation and the types of property subject to it. The provision is common with real estate rental properties and occurs when the property is sold. In addition, taxpayers can use investing tools like the 1031 tax-deferred exchange to minimize the tax burden due to recapture. Key Takeaways Depreciation Recapture refers to the portion of the gain realized from the sale of depreciable property and taxed as ordinary income....