Recapture

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Recapture

A provision in a contract that allows one party to recover (recapture) some degree of possession of an asset, such as a share of the profits derived from some property.

Recapture

1. An agreement between a buyer and a seller whereby the seller is allowed to repurchase the good or other asset within a certain period of time.

2. See: Depreciation Recapture.

Recapture.

When you recapture assets, you regain them, usually because of the provisions of a contract or legal precedent.

When a contract is involved, you may be entitled to recapture a percentage of the revenues from something you produce in addition to being paid the cost of producing it.

For example, a hotel developer might be entitled to recapture a portion of the hotel's profits. Most of the time, recapture works in your favor, but depending on the situation, it can also mean a financial loss.

A negative form of recapture occurs when the government makes you repay tax benefits that you've profited from in the past. For example, say that your divorce settlement calls for you to pay $150,000 to your ex-spouse over three years. If you pay all the money in the first two years in order to qualify for a tax deduction, and pay nothing in the third year, the IRS may force you to recapture part of your deduction in the third year and pay taxes on it.

recapture (tax)

Same as depreciation recapture.

Recapture

The inclusion of a previously deducted or excluded amount in gross income or tax liability. Recapture may be applicable to accelerated depreciation, cost recovery, amortization, and various credits.
References in periodicals archive ?
1503-2(d)(3)(i)(A), a parent's basis in a member's stock does not increase when the member recognizes income from recapturing a previously deducted DCL.
Thus, rather than recapturing all depreciation like Sec.
Further, bonus depreciation will be considered excess depreciation; falling below the 50% mark after the first year of service results in recapturing both bonus and MACRS depreciation in the failure year--an extremely undesirable situation.
The new technology makes it easier to measure volatile organic compounds that are dissolved in water, a situation common to any organization that uses a steam process for recapturing volatile organic compounds.
Additionally, many states do not take into account the Federal annual gift exclusions when recapturing gifts; for example, Pennsylvania allows only a $3,000 exemption for each gift made within one year of death.