recapture

[gman]

Client has several rent houses. Client is thinking of selling all of them, possibly on installment contracts. Entire depreciation would be recaptured in year of sale??

Thanks

[ChEAr$]

Yes
yes
yes

above in order to lengthen message for acceptance.

[Gretel]

Client has several rent houses. Client is thinking of selling all of them, possibly on installment contracts. Entire depreciation would be recaptured in year of sale??

I would talk to client about dropping capital gain rates starting in 2008. He surely has some cap.gains and will not pay any income tax on it if in 15% tax bracket.

[JoshinNC]

If the client has multiple rentals

and disposed of all of them in 2008 it highly unlikely that he would be in 15% bracket, even if this is only income source. I have a client sell 2 rentals in 2006 and it added $105,000 in income (and we're not in a crazy boomtown like Vegas, SoCal or Long Island).

[Gretel]

and disposed of all of them in 2008 it highly unlikely that he would be in 15% bracket, even if this is only income source. I have a client sell 2 rentals in 2006 and it added $105,000 in income (and we're not in a crazy boomtown like Vegas, SoCal or Long Island).

Well, depending on when you bought rental, you could have losses on some. Where I live you can easily find a rental for $30-50,000. So it always depends and we never have all the facts when a question is asked.

[Davc]

Yes
yes
yes

above in order to lengthen message for acceptance.

(Climbing on my podium again)
No
No
No
No
NO!

UNRECAPTURED 1250 GAIN would be RECOGNIZED as capital gain capped at the 25% rate to the extent that gain is recognized following the normal installment sale rules. Aftre all of the URC 1250 gain has been reported, then what remains is standard 1231 gain.

[Bucky]

Agree with davc

If they are residential and macr depr you would not recapture all in year of sale. You would recapture at up to 25% on unrecaptured 1250 gains.