Depreciation recapture: what is it and how to avoid surprises #realestate
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Summary
AI-generatedThis video explains depreciation recapture and how it affects the sale of a rental property. It uses an example to show how depreciation reduces the adjusted basis, increasing the taxable gain upon sale. The video also discusses strategies like 1031 exchanges or passing the property to heirs to avoid paying depreciation recapture taxes.
Key insights
When selling a rental property, the total gain is the difference between the sales price and the adjusted basis. This total gain can be comprised of market appreciation and prior depreciation.
Curated by Learn STR by GoStudioM · Summary & key insights generated by AI · Reviewed by editorial