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Can the depreciation recapture from the sale of a rental property be used as income in calculating QBI? I believe the depreciation recapture is treated as ordinary income, in which case it would be eligible? However, I read that unrecaptured section 1250 gain can't be used in calculating QBI.
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You are correct on both questions. The depreciation recapture treated as ordinary income is included in QBI whereas unrecaptured 1250 gain is capital gain taxed at 25% and not in QBI.
I'm asking if the depreciation recapture from the sale of a rental property is ordinary gain or Section 1250 gain? Therefore, can the depreciation recapture be added to QBI?
Can the depreciation recapture from the sale of a rental property be used as income in calculating QBI? This is my original question, can anyone answer it?
No. The depreciation recapture portion for the sale of a rental property is section 1250 gain and therefore not part of QBI.
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