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taxmap/pubs/p946-027.htm#TXMP4efd3559 When Do You Recapture   MACRS Depreciation?

Depreciation, Recapture

Words you may need to know (see Glossary)

• Disposition
• Nonresidential real property
• Recapture
• Residential rental property

When you dispose of property that you depreciated using MACRS, any gain on the disposition generally is recaptured (included in income) as ordinary income up to the amount of the depreciation previously allowed or allowable for the property. Depreciation, for this purpose, includes the following.

• Any section 179 deduction claimed on the property.
• Any deduction under section 179B of the Internal Revenue Code for capital costs to comply with Environmental Protection Agency sulfur regulations.
• Any deduction under section 179C of the Internal Revenue Code for certain qualified refinery property placed in service after August 8, 2005.
• Any deduction under section 179D of the Internal Revenue Code for certain energy efficient commercial building property placed in service after December 31, 2005.
• Any deduction under section 179E of the Internal Revenue Code for qualified advanced mine safety equipment property placed in service after December 20, 2006.
• Any deduction under section 190 of the Internal Revenue Code for removal of barriers to the disabled and the elderly.
• Any deduction under section 193 of the Internal Revenue Code for tertiary injectants.
• Any special depreciation allowance previously allowed or allowable for the property (unless you elected not to claim it).
• Any deduction claimed for clean-fuel vehicles and clean-fuel vehicle refueling property placed in service before January 1, 2006.

There is no recapture for residential rental and nonresidential real property unless that property is qualified property for which you claimed a special depreciation allowance. For more information on depreciation recapture, see Publication 544.

Previous Page:  Publication 946 - How to Depreciate Property - How Do You Use General Asset Accounts? Next Page:  Publication 946 - How to Depreciate Property - Additional Rules for Listed Property Use     to find additional instances of index items.