DEFINITION of 'Recapture'

1. A condition set by the seller of an asset that gives him/her the right to purchase back some or all of the assets within a certain period of time.

2. A situation where an individual must add back a deduction from a previous year to his or her income.

BREAKING DOWN 'Recapture'

1. A stipulation that allows you to buy back your shares at some future point in time, if you wish.

2. For example, when a business sells an asset and must recapture (add back) some of the depreciation.

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