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Section 1250

29 July, 2015 - 16:31

Section 1250 treats as ordinary income, § 1250(a)(1)(A), the recapture of so-called “additional depreciation,” i.e., the excess of depreciation adjustments over straight-line adjustments on “section 1250 property” held for more than one year. § 1250(b)(1). Section 1250 property is real property to which § 1245 does not apply. Since § 168 allowances on real property are all straight-line, the applicability of § 1250 is limited.

Nevertheless, depreciation allowances on real property are recaptured for individual taxpayers to an extent through the (complicated) interplay of § 1(h)(6) (supra) and § 1231 (infra).