Depreciation Recapture with low capital gain.

[John Alosio]

Hello BP family.

I'm here today with a tax question relating to the sale of a rental property.

I have a property under contract right now, my sale price is right around my cost basis.

For depreciation recapture, I understand that if you sell at a net loss, recapture is forgiven. But in my case there would be a slight overage. Just not enough to cover what is owed.

Hypothetically, lets say that I would be on the hook to repay the IRS $5,000 in recapture. However the net gain is only $1,000 beyond the cost basis. What would happen at that point?

Would the IRS then take everything above cost basis until recapture is satisfied?

Thanks in advance for your time.

Cheers