09-18-2003, 04:26 AM
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 Re: Depreciation Recapture - quote - > This applies to properties placed in service from 1981
Incorrect. Only nonresidential real property purchased> through 1986. Property placed in service during those > years are subject to Section 1245, between 1981 and 1986 is 1245 property. Residential real property purchased during those years is 1250 property. Excess depreciation above the straight line is Section 1250 gain and is recaptured as ordinary income. The straight-line depreciation is Unrecaptured Section 1250 Gain and is taxed at the lesser of 25% or your marginal rate. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
09-17-2003, 04:35 AM
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| Re: Depreciation Recapture - quote - > > I want to confirm that: (1) a residential rental property
1245 recapture is [at] "ordinary income" and is only taxable> > placed in service in 1987 using straight line depreciation > > is not subject to recapture; and (2) residential rental > > recapture is at ordinary income rates and NOT a 25% rate. > > > According to what I have read: there is a quirk in the tax > > statute under which all depreciation, whether straight-line > > or not, is subject to the ordinary income-tax rates > > attributable to recapture. This applies to properties placed > > in service from 1981 through 1986. Property placed in > > service during those years are subject to Section 1245, > > which is full recapture, regardless of the schedule, rather > > than Section 1250, which is recapture of depreciation above > > straight-line depreciation. > Can you provide any sort of cite for this? This would be > most unfavorable if true. upon a time that said property is sold or converted. If your recieving a tax benefit [at] ordinary rates when you depreciate property, then the re-capture would also be "Ordinary Income". Otherwise your recieving a dual benefit for which the statute was not intended. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| depreciation, recapture |
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