Depreciation Recapture At Sale Calculator

Accumulated depreciation recaptured at sale at section 1250 or ordinary rates.

Accumulated depreciation

Personal property depreciation

1250 recapture rate %

Ordinary rate %

Total recapture tax

$1,019,000

Section 1250 tax

$575,000

Section 1245 tax

$444,000

How the math works

Real property = total − personal. 1250 tax = real × 25%. 1245 tax = personal × ordinary rate.

$3.5M − $1.2M = $2.3M × 25% = $575k + $1.2M × 37% = $444k = $1.019M total recapture.

How to Use

Enter accumulated depreciation.
Enter personal property depreciation.
Enter 1250 recapture rate %.
Enter ordinary rate %.
Read total recapture tax.

Frequently Asked Questions

Section 1250?

Real property depreciation recaptured at 25% (Section 1250 unrecaptured). Cannot be reduced by long-term capital loss. Applies to building structure depreciation from MACRS 39-year or 27.5-year.

Section 1245?

Personal property depreciation recaptured at ordinary income rates (up to 37%). Applies to 5-year, 7-year, 15-year depreciation from cost segregation. Large tax cost at sale on cost seg reclassified amounts.

Tax planning?

1031 exchange defers recapture. Installment sale spreads over years. Charitable remainder trust converts to income stream. Aging of ordinary-rate recapture to long-term capital gain impossible — ordinary once, always ordinary.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.