Depreciation Recapture

Depreciation recapture is the taxable income earned by the sale of depreciated real estate assets. This income must be reported as ordinary income for tax purposes. Depreciation recapture is evaluated when and if the sale price of an asset is greater than the tax basis or adjusted cost basis. Therefore, depreciation recapture is the taxable income that is earned when a property is sold off at a price that is greater than its depreciated price.


Depreciation recapture allows the IRS to collect taxes on the sale of a commercial asset that the taxpayer had used prior to balancing taxable income.

This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.

Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.