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Updated almost 6 years ago on . Most recent reply

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117
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13
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Payman A.
  • Los Angeles, CA
13
Votes |
117
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Depreciation recapture

Payman A.
  • Los Angeles, CA
Posted

Hi all.  I'm a bit confused on this issue as I read about depreciation recapture being taxed as "ordinary income" then I see mentions of a "flat 25% rate".  I have a 3 part questions:

- So will the rate depend on your tax bracket like ordinary income or is it a flat 25% tax? (asking because I'm in a low tax bracket, not because I'm worried about paying a higher than 25% rate)

- If a 1031 is used to exchange down, how is the depreciation allocated?  (are the deferred and payable portions directly proportional to the values of the relinquished and replacement properties?)

- Is depreciation recapture in fact avoided entirely if an investment property is sold at a loss or breakeven?

Thanks in advance,

Payman

Most Popular Reply

User Stats

1,727
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837
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Dave Toelkes
  • Investor
  • Pawleys Island, SC
837
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1,727
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Dave Toelkes
  • Investor
  • Pawleys Island, SC
Replied

@Account Closed

If your CPA needs this as a reference, then you should consider getting a new CPA

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