Business

Depreciation Recapture Guide: What Is Depreciation Recapture?

Written by the MasterClass staff

Last updated: Feb 25, 2022 • 4 min read

If you own a piece of capital property like a real estate rental property, you can claim depreciation deductions on your annual income taxes. However, when you sell that capital property and turn a profit, the Internal Revenue Service (IRS) may levy a tax on it via a depreciation recapture.