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posted May 16, 2025 6:07:19 PM

If I deduct the entire cost in one year of my business van, do I have to recapture the depreciation no matter when I sell it?

I'm being told I'd owe tax on the total deduction ($140K deduction) no matter when I sell the van.

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1 Replies
Level 15
May 16, 2025 6:17:14 PM

that is correct. regardless of when you sell it since it has a zero tax basis the proceeds are income treated as depreciation recapture - 1245  - ordinary income you'll see it on form 4797. if proceeds are less than the cost the recapture is the amount of proceeds not the $140K in depreciation you originally took. if proceeds are more, the full $140K is recaptured and the excess is treated as capital gain.