MaryK4: Thanks for the answer. Just to clarify: What you are saying is that if there is no accelerated depreciation (like the person who was asking you the question indicated that he used a straight line - 27.5 year depreciation method), then there is no ordinary income to be taxed. His gain from selling his rental property is then a Section 1250 property, form 4797 reportable, and Schedule D calculated event - gain will be taxed at capital gain rate. However, the recapture of the depreciation will be taxed at 25%. Am I understanding what you said correctly? Thanks.
