Depreciation Recapture and Non-taxable Rental Income

Accounting
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The term recapture in depreciation indicates that extra gain that falls under capital gain is grouped under ordinary income and therefore, ought to be subjected to taxation (Kulsrud & Pratt, 2011). The Congress holds that recapture of depreciation on real estate properties should be allowed based on Section 1250. The house considered regulations for probable change in the rule guiding depreciation recapture as well capital gains.
The current law stipulates that capital gain ought to be taxed at the rate of fifteen percent (Kulsrud & Pratt, 2011). This allows property owners to sell their properties at an appreciated price while on the hand; lower rates have an effect on the lock-in. The rule is admissible on condition that the real estate property underwent a straight-line mode of depreciation. Therefore, amounts exceeding the amount achieved through straight line depreciation are recaptured.
A taxpayer can be able to receive rental income that is not subject to taxation on a numbe...