@Opus 17 wrote:
@Anonymous_ wrote:
See Treas. Reg. §1.263(a)-1(f)(3)(iii))
There is nothing directly about recapture in that section. But it does say that safe harbor expenses may not be capitalized. If it's not capitalized it does not add to the basis, and there is nothing to recapture from.
Once again, it is not recapture. As a result of the expensing of the asset, its basis is reduced to zero ($0).
When the asset is later sold, it is neither capital gain nor Section 1245 gain (recapture). Rather, the sale results in ordinary income.
