Depreciation recapture

[jmc]

When total 1231 Loss is $36,000 and 1245 depreciation is $53,000, $36,000 is Ordinary Loss.
Is $53,000 depreciation not recaptured at all since there is 1231 loss or, after recapture, should $17,000 be reported as Ordinary Income?

[abby]

section 1245

Code section 1245 addresses sales of section 1231 property sold at a gain - if the property is sold at a loss, it nevers 'leaves' 1231 and thus no recapture issue.

There IS a carryforward for 5 years of section 1231 losses that will offset 1231 gains as ordinary- most software will track this for a continuing client.

[Bees Knees]

To clarify, there is no such thing as a loss and a gain on the sale of the same property. You first calculate gain or loss. Sale price minus adjusted basis equals gain or loss. After you have determined gain or loss, then you go through and figure out how much of that gain or loss is Section 1231 and how much of any gain will be 1245. You can’t have depreciation recapture under Section 1245 if there is a loss on the sale of the property.

[jmc]

Thanks to both of you for confirming.