Depreciation recapture does not apply to a transfer coming under Sec.351 unless the transferor recognizes gain on depreciable property that is transferred.

Question

Quizplus · Accepted Answer

Depreciation recapture applies when the transferor recognizes gain upon disposing of depreciable property. However, if the transfer is made under Sec. 351, which involves the transfer of assets to a corporation by shareholders in exchange for stock, then depreciation recapture does not immediately apply.

Depreciation Recapture Does Not Apply to a Transfer Coming Under