Avs19
Level 7
a week ago
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I was thinking that the recapture gets spread out as future payments are received.
So, regardless of cash or accrual, let's say you sell an asset for $25K. You purchased that asset for $50K and have fully depreciated it. The sales contract states that you'll receive $5K for 5 years beginning in the current year. You have to recognize the full $25K recapture as ordinary income in year one?