If a C corporation uses straight-line depreciation on real estate (§ 1250 property), no gain on the sale of the property will be recaptured as ordinary income.

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When a C corporation uses straight-line depreciation on real estate (§ 1250 property) and sells the property, any gain on the sale will be recaptured as ordinary income. This is because depreciation taken on real estate reduces the property's adjusted basis, which in turn increases the amount of gain subject to recapture.

If a C Corporation Uses Straight-Line Depreciation on Real Estate