Had a q on US taxes related to the sale of a long term real estate asset. I had been availing of the tax benefits relating to the annual depreciation for the asset and my understanding is there would be a depreciation recapture during the filing of taxes.
My question is would this be treated like a long term gain and could it be offset by long term losses on things like the sale of stocks?
Posted by guynyc17
1 Comment
Depreciation recapture gets hit with a different tax rate than regular long term gains (up to 25% vs the usual 0/15/20%). Pretty sure you can’t offset it with stock losses either since it’s treated as ordinary income up to that 25% cap
The gain above your original basis minus depreciation though, that part should qualify for long term treatment and can be offset. Definitely worth running this by a tax pro since depreciation recapture rules are kinda messy