Question

When an individual taxpayer sells depreciable real property at a gain, the lesser of the accumulated depreciation or the recognized gain is taxed at a maximum rate of

Answer 1

25%.

Step-by-step explanation:

When you consider that, Depreciation recapture is a term that describes the actual gain derived from after selling depreciable capital property. It is assessed when the sale price of an asset exceeds the tax basis or adjusted cost basis.

Hence, in this case, the gain due to accumulated depreciation is taxed at a max 25%. However, If the recognized gain is higher than the accumulated depreciation, the remaining gain is taxed at at 0/15/20 %, depending on the taxpayer's income.