Here's a simple description of "unrecaptured section 1250 gain" from a website of Financial Tax Information. It's supposed to help us understand how that kind of gain gets taxed.
The website says this: IRS expects you "...to pay back the taxes that you would have paid if you didn't depreciate that [depreciable] portion of the house. Section 1250 requires you to pay a flat 25 percent rate on these gains, instead of your regular income tax rate or the capital gains rate."
Is this statement correct? A simple "yes" or "no" answer will be just fine.
Later, the same online source says "Add your recaptured depreciation to your basis. The result is your adjusted basis for the rental house."
No comment should be necessary on that.
- posted 2 years ago