Avoid Tax Surprises: What is Depreciation Recapture?

What is tax depreciation recapture?
Section 1245 Property = “tangible” or “personal” property
Section 1250 Property = “real property”
When section 1245 property is sold at a gain, amounts previously claimed as depreciation (allowed or allowable) are recaptured at ordinary income tax rates, and the remaining gain is taxed at capital gains rates. This is because they have already received favorable tax treatment on the property through depreciation or amortization deductions.
When section 1250 property is sold at a gain, the difference between the straight-line depreciation and the accelerated method claimed is taxed as ordinary income, while the rest of the gain is taxed at capital gains rates.
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