I know turbotax handles this but for own knowledge special bonus depreciation, 179 , only straight line, what has depreciation recapture on sale?
Exactly what are you trying to figure out with respect to recapture?
There is recapture on depreciation taken, or that should have been taken, with any cost recovery mechanism.
There is a difference, however, between different types of property (e.g., Section 1245, Section 1250 property).
every depreciable asset has depreciation recapture if sold for more than its tax basis at the time of sale (there's a gain on sale). the only limit is it can't exceed the gain. thus, even accelerated MACRS depreciation is subject to recapture.
"every depreciable asset has depreciation recapture if sold for more than its tax basis at the time of sale (there's a gain on sale)."
That's recapture. Different kinds of depreciation change your basis, and they change the timing of when the basis is adjusted, but they don't change the overall concept.
Suppose you have an asset with a 5 year life and a cost of $25,000, and you sell it after 3 years for $12,000.
- Under section 179, it is fully depreciated in the first year, so when you sell it, you have a $12,000 gain that is treated as recapture.
- Under normal depreciation, the adjusted basis might be $10,000 after 3 years, so you have a $2000 gain that is treated as recapture.
- Under bonus depreciation, your basis is something between zero and $10,000 (I'm not expert in the rules for bonus depreciation but it will be more than straight line) so you will have some gain that is taxed as recapture.
On the other hand, suppose you sell the asset after 6 years, it's basis will be zero at that time no matter what depreciation you use, so any sales proceeds is a gain subject to recapture tax.
@Opus 17 wrote:
...Under section 179, it is fully depreciated in the first year....
That is more along the lines of bonus depreciation.
Under Section 179, there are dollar limits and business income limits so an asset is not necessarily fully depreciated (expensed) in the first year it is placed in service.
You first need to tell us if it is real estate, or non-real estate. The rules differ.
As the other comments mentioned, there is often "recapture" when an asset is sold (when the selling price of non-real-estate is higher than the Adjusted Basis). But in some cases there can be different kinds of "recapture" BEFORE an asset is sold (such as when you use Section 179 or if you are talking about "Listed Property", such as a vehicle).
Because the rules can be very complex, it is almost impossible to give you a complete answer unless we know exactly what kind of asset you are talking about, and what kind of depreciation has been taken.
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