https://innago.com/landlords-a....nd-taxes-understandi
Landlords must understand tax recapture, a concept that applies when selling a rental property. Recapture refers to the process where previously claimed depreciation deductions are "recaptured" by the IRS and taxed as ordinary income. Depreciation reduces taxable rental income during ownership, but when the property is sold, the IRS may require repayment of those deductions. The recaptured amount is taxed at a maximum rate of 25%. This is separate from capital gains tax, which may apply to any profit made from the sale. La
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