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Old 09-03-2015, 10:11 PM
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Recaptured Real Estate Depreciation offset by Stock Capital Losses??

I sold a rental property this year providing a $175k total gain, of which $150k is recaptured depreciation and & 25k is long term capital gains. In addition to the $25k of long term capital gains, can I use short term equity stock losses of $125k to offset any of the $150k in recaptured depreciation? I've seen mixed answers to this question online. Thanks in advance!



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Old 09-05-2015, 11:36 PM
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Originally Posted by portnerdj View Post
I sold a rental property this year providing a $175k total gain, of which $150k is recaptured depreciation and & 25k is long term capital gains. In addition to the $25k of long term capital gains, can I use short term equity stock losses of $125k to offset any of the $150k in recaptured depreciation? I've seen mixed answers to this question online. Thanks in advance!
Depreciation recapture is essentially a specially-taxed type of capital gain the resulting amount is taxed at a maximum rate of 25 % as unrecaptured Section 1250 gain.You can offset your ST equity losses of $125K againt any of the $150K sec 1250 ordinary gain, I mean unrecap depre; then your ordianry gain’d be $25K ;$150K minus $125K. As you sell your asset for a gain after taking deductions for depreciation, sec 1250 depreciation recapture is used to tax the gain on the sale of the pty/asset. Your sec 1250 depre recapture is usually reported with other LT/ST capital gains / losses on sch D of 1040, before being reported on your 1040. You also need to file form 8949 for your sho rterm capital loss. and then Part I of Schedule D



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Old 09-06-2015, 08:45 AM
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Thank you Wnhough! Appreciate the insight.



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