Part of the gain beyond the original cost basis is taxed as a capital gain and qualifies for the favorable tax rate onlong-term gains. The part related to depreciation is taxed at theunrecaptured gains section 1250tax rate specific only to gains on real estate property. The unrecaptured secti...
Section 1250 is calculated as the lesser of two amounts. The first amount is the excess of accelerated depreciation claimed on real property over what would have been the allowable amount under a straight-line method. The second amount is the gain realized upon disposition. What Triggers Depreci...