Hal_Al
Level 15

Deductions & credits

@US_Winnie 

TurboTax has done it correctly.  

Depreciation recapture is technically a long term capital gain.  But, it is also a "section 1250" gain; meaning it's taxed as ordinary income, but with a cap of 25%. See the Sch D gain worksheet for tax calcs.

 

More importantly, the depreciation recapture part of the gain does not qualify for the home sale exclusion.