Unrecaptured Section 1250 Gain

What is the 'Unrecaptured Section 1250 Gain'

The unrecaptured section 1250 gain is a type of depreciation-recapture income that is realized on the sale of depreciable real estate. Unrecaptured Section 1250 income is taxed at a 25% maximum capital-gains rate (or less in some cases). Unrecaptured Section 1250 gains are only realized when there is a net Section 1231 gain that is not subject to recapture as ordinary income.

BREAKING DOWN 'Unrecaptured Section 1250 Gain'

A Section 1250 gain is recaptured upon the sale of depreciated real estate, just as with any other asset; the only difference is the rate at which it is taxed. Assets that do not qualify under Section 1250 are taxed at a different rate.

Unrecaptured Section 1250 gains and losses are not reported on Schedule D, but on worksheets within the Schedule D instructions, and are carried to the 1040.

RELATED TERMS
  1. Form 2439: Notice to Shareholder ...

    A tax form distributed by the Internal Revenue Service (IRS) ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has ...
  3. Section 1250

    A section of the United States Internal Revenue Service Code ...
  4. Section 1245

    A part of the IRS code stating that depreciable property that ...
  5. Depreciation Recapture

    The gain received from the sale of depreciable capital property ...
  6. Section 1041

    A section of the Internal Revenue Code that mandates that any ...
Related Articles
  1. Term

    What Is Section 1231 Property?

    Section 1231 property is depreciable business property that’s held for a year or longer.
  2. Home & Auto

    Leasing to Section 8 Tenants?

    Real estate investors and landlords: It's worthwhile to investigate the section 8 market. Learn about the pros and cons of leasing to section 8 tenants.
  3. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  4. Investing Basics

    CPA Exam tips

    Tips for the CPA exam - how to approach it, what to expect, and the time it takes to complete.
  5. Investing

    Top Tips for Deducting Stock Losses

    Investors who know the rules can turn their losing picks into tax savings. Here's how to deduct your stock losses.
  6. Markets

    Speed Read SEC Filings For Hot Stock Picks

    SEC forms can be a real headache. Find out how to make your research more efficient - and more effective.
  7. Professionals

    What To Expect On The CFA Level II Exam

    This article will help you understand the nuances of the CFA Level II exam.
  8. Investing

    5 Ways to Reduce Your Taxes After a Windfall Gain

    Windfall income is a welcome padding to any bank account, but plan for the government's share before you start spending.
  9. Investing

    Understanding Capital Gains

    Capital gain refers to the increase in value of a capital asset or an investment security upon sale. In other words, if you buy company stock, real estate or fine art and then sell it for more ...
  10. Taxes

    Comparing Long-Term vs. Short-Term Capital Gain Tax Rates

    Learn about the difference between short- and long-term capital gains and how the duration of your investment can impact your tax liability.
RELATED FAQS
  1. What does an income statement look like?

    Learn about the different parts of an income statement and how investors review them carefully to determine the health of ... Read Answer >>
  2. What are some examples of cash flow from operating activities?

    Learn about the cash flow statement and cash flows from operating activities, and observe some examples of cash flows from ... Read Answer >>
  3. Are capital gains taxed differently in different countries?

    Learn about capital gains taxes in the Unites States as well as those of other countries, where these tax rates vary significantly. Read Answer >>
  4. How does the marginal tax rate system work?

    The marginal tax rate is the rate of tax that income earners incur on each additional dollar of income. As the marginal tax ... Read Answer >>
  5. What is the tax impact of calculating depreciation?

    Understand the tax implications of a company's depreciation. Learn how differences in accounting methods change the amount ... Read Answer >>
  6. Is the marginal tax rate a progressive tax?

    Learn how the marginal tax rate is a progressive tax that takes a higher percentage of income tax from high-income earners ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center