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Supporting Details

✅Types of depreciation recapture

-Section 1245 Property = “tangible” or “personal” property
-Section 1250 Property = “real property”

✅ When section 1245 property is sold at a gain, amounts previously claimed as depreciation (allowed or allowable) are recaptured at ordinary income tax rates, and the remaining gain is taxed at capital gains rates. This is because they have already received favorable tax treatment on the property through depreciation or amortization deductions.

✅ When section 1250 property is sold at a gain, the difference between the straight-line depreciation and the accelerated method claimed is taxed as ordinary income, while the rest of the gain is taxed at capital gains rates.

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Disclosure Disclaimer: The information in this video is provided for general educational purposes only and may not reflect changes in federal or state laws. Please consult with a professional tax advisor about your facts and circumstances.

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