Section 1250 Depreciation Recapture
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Gain from selling sec 1250 property real estate is subject to recapture the excess of the actual amount of depreciation previously claimed for the property over the amount of depreciation that would have been allowable under the straight line method limited to the gain on the sale is taxed as ordinary income.
Section 1250 depreciation recapture. An unrecaptured section 1250 gain is an income tax provision designed to recapture the portion of a gain related to previously used depreciation allowances. Depreciation recapture is an income tax rule in which a gain on the sale of property is treated as ordinary income or partly as ordinary income to the extent that accelerated depreciation was taken on the property. What is depreciation recapture.
Depreciation recapture on section 1250 property. Part or all of the gain on the sale or other disposition of section 1250 property may be treated as ordinary income. For section 1250 property held more than one year the amount of gain generally treated as ordinary income is the lower of the following.
This accumulated 1250 depreciation is taxed at a flat rate of 25 upon disposition sale up to a maximum of the amount of the recognized gain.
