Rental property depreciation recapture duplex less than 25%?

[Zeek77]

I might be having an issue with turbo tax in regards to it calculating the correct depreciation recapture rate. My tax bracket is 22%, and that is what it is using against the 48K in depreciation I took. I thought it was 25%, or is that a maximum limit only, and it can be less if your tax bracket is less? I tried to follow the schedule D tax worksheet, and it seems like that part is correct. But on Part III of form 4797, it only has values for lines 20-24, and nothing under line 26 for section 1250 property. 

Could this be because under the rental properties SCH E tab, when the depreciated asset lists are shown, I selected that "special handling required" due to business use percentage of asset varied during the years you owned the asset. 

[AmeliesUncle]

---

@Zeek77 wrote:

My tax bracket is 22%, and that is what it is using against the 48K in depreciation I took. I thought it was 25%, or is that a maximum limit only, and it can be less if your tax bracket is less?

---

It is taxed at your regular tax rate (22% in your case), UP TO 25%.   So it is doing it correctly.

[Mike9241]

max is 25% for 1250 recapture. if the property was depreciated under MACRS- then there is no excess depreciation to be reported on line 26. MACRS for real property is straight-line depreciation. that line would only come into play only if the depreciation taken exceeded the straight-line amount for the same period.

so line 24 goes to line 32. line 32 goes to line 6. if no prior 1231 losses, the amount goes to schedule D. if you do have prior 1231 losses only the excess goes to schedule D. 

there is a section 1250 worksheet in the instructions for schedule D. as you will see many items can affect 1250 recapture.

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf 

[Zeek77]

Thank you!

[Zeek77]

Thanks Mike!