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Income taxSubject 17 of 19

Depreciation recapture

Tax treatment that can recharacterize or specially tax part of gain tied to prior depreciation deductions.

Also called: recapture

Direct answer

What does Depreciation recapture mean?

Tax treatment that can recharacterize or specially tax part of gain tied to prior depreciation deductions.

Exam cue: The tax result depends on property type, prior deductions and current federal rules, so exam questions should supply the needed facts.

What does it look like in a question?

New York example

A rental-property seller accounts for depreciation previously allowed when calculating the tax result.

Common exam trap

What should you not confuse it with?

Recapture is not a repayment of the physical building's lost value.

Related income tax terms

Adjusted basisOriginal basis increased or decreased by tax-law adjustments such as qualifying improvements and allowed depreciation.Amount realizedThe total value received on a disposition, adjusted for selling expenses and other items as tax law provides.BasisA tax measurement used to determine gain, loss, depreciation and other tax consequences for property.Capital gainGain from the sale or exchange of a capital asset, calculated under tax law and subject to classification and exclusions.Like-kind exchangeA tax-deferred exchange under Internal Revenue Code section 1031 for qualifying real property held for investment or productive use in a trade or business.Principal residenceA person's main home for tax purposes, determined from use and the applicable facts and rules.
Sources used2 references with section locators

The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.

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