TaxGuyBill
Level 15

As @taxiowa  said, only "recapture" would be fully taxable in the first year of the Installment Sale.

For real estate (§1250 property), "recapture" is based on depreciation in EXCESS of Straight-Line depreciation.  That would be extremely rare for a rental of a residential rental property.

The gain due to Straight-Line depreciation is "Unrecaptured Section 1250 Gain".  That is NOT the same as "recapture".  And "Unrecaptured Section 1250 Gain", is NOT fully taxable in the first year of the Installment Sale.

Because you only took Straight-Line depreciation, there is NOT any "recapture", so that is why it is not showing as fully taxable in the first year of the Installment Sale.

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