pk
Level 15
Level 15

Business & farm

@jayneway  agreeing with my colleague @AmeliesUncle  for an excellent reply to the question as articulated, I would juts like to add :

(a) Recaptured depreciation is the same as allowable  "accumulated depreciation" , whether recognized or not

(b) It raises the computed gain by lowering your basis for purposes of  gain/loss computation

(c) any gain caused by the accumulated depreciation is "recaptured" and treated as  ordinary gain ( not capital gain).

(d) It is a  "recapture" in the sense that the allowable depreciation had reduced  ( under the Passive Activity Loss Limitation) your ordinary income ( in the past ) and if not, has been  accumulated into your suspended losses -- thus lowering your gain from disposition  of the asset.

The answers here are general  and as @AmeliesUncle  pointed out , the interpretation etc. depends on the exact facts and circumstances.

Hope this helps