Article Date:
July 2008

Word Count:



1031 Exchange to Avoid Recapture

Let me describe the situation. I buy an asset this year and claim 50 percent bonus depreciation. Next year, I sell that asset. What are my recapture considerations? (J.B., Plano, Texas)


To the extent that you have gain on sale attributable to depreciation and Section 179 expensing, you have recapture taxed at ordinary income rates.


Example. You



buy a vehicle for $30,000,


use it 100 percent for business (the 100 percent is to keep the numbers easy),


depreciate it ... Log in to view full article.

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