Depreciation recapture

[Payman A.]

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

[Dave Toelkes]

@Account Closed

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