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Question

How do I report depreciation recapture when selling a converted rental property?

Answer

You generally report recapture on Form 4797 and Schedule D. Depreciation on the building comes back as unrecaptured Section 1250 gain at a maximum rate of 25%, while depreciation on furnishings and fixtures is recaptured under Section 1245 at ordinary income rates. A qualified tax professional can handle the reporting and coordinate the sale with the rest of your tax picture.

Related FAQs

Where do I check whether short-term rentals are allowed at my address?

Where can I find help evaluating a home conversion tax strategy?

Do I have to manage the rental myself?
Tax Planning Financial Planning Charitable Giving Retirement Planning Relocating in Retirement Impact of New Laws Tax Basics Tax Tips & Tricks OBBBA Protecting Your Legacy Year-Round Tax Planning Real Estate FAQs
Last Updated Sept. 23, 2026
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