However, selling depreciable plant and equipment may force the seller to recognize ordinary income from
depreciation recapture.
The 2015 Special Distribution is in an amount that includes the sum of: estimated foreign earnings and profits repatriated as dividend income to be recognized in 2015; taxable income in 2015 from
depreciation recapture in respect of accounting method changes commenced in Equinix's pre-REIT period; and certain other items of taxable income.
Additionally, gain from the disposition of property that is otherwise excluded from UBTI may be subject to
depreciation recapture under Sec.
Citing case law and IRS code, the 24 chapters discuss gifts and inheritance, employee benefits, property transactions, life insurance and annuities, discharge of indebtedness, damages for physical injury, divorce and separation, business and income-producing expenses, capital gains and losses,
depreciation recapture, and non-recognition provisions.
But it also requires
depreciation recapture upon the sale of the home for a gain.
If depreciable property ([section]1245 property) is transferred, and only like-kind depreciable property is received in exchange,
depreciation recapture (taxable ordinary gain) is generally not triggered.
Important to real estate are proposals to increase the depreciable lives of real property used in business or held for investment; raising the tax rate on gain from
depreciation recapture and repealing the tax rules that allow taxpayers to exchange like-kind real estate on a tax-deferred basis.
IREM and CCIM Members representing 30 states and the District of Columbia will hold 180 meetings with their respective senators, representatives and their staffs to raise awareness of the industry's legislative positions on federally assisted housing, terrorism risk insurance and tax issues, including depreciation increases,
depreciation recapture and like-kind exchange.
The original owner would have greater gain and
depreciation recapture upon the sale of rental property held for a number of years.
But if the property is subsequently sold in a taxable transaction, the basis reduction accompanying the catch-up could result in the taxpayer's being taxed on the gain at ordinary income tax rates due to the
depreciation recapture rules.
But tax due on
depreciation recapture is not deferrable, so
depreciation recapture tax is calculated at closing for the entire transaction.
Under current tax law, when owners/investors sell a property, they have to pay capital gains tax and
depreciation recapture taxes on any gain.
