It is heard very often about a concept called "deprecation recapture".
On K-1 form, there also has a line called "unrecaptured section 1250 gain".
What is the difference between the two?
Is there any tax treatment difference between the two as well?
1250 - real property
1245 - personal property.
Hi sjrcpa,
Maxinum tax rate for UNrecapture depreciation is 25%.
What is the maxinum tax rate for recapture depreciation?
Is it taxpayer's ordinary income effective tax rate or marginal tax rate?
Google is your friend, if you can't find the answer in the textbook:
“Unrecaptured section 1250 gain" is a very confusing term, but it really means recapturing the depreciation of 1250 property (real estate).
So why isn't it just called "section 1250 recapture"? Technically, that only refers to property that used accelerated depreciation. But section 1250 property hasn't been eligible for accelerated depreciation since the mid 80s, so you may have section 1250 recapture if it's an old property that they have owned for a long time. But these days you usually only have these two types of depreciation recapture:
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