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

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If a C corporation uses straight-line depreciation on real estate, a portion of the gain on the sale of the property will be recaptured as ordinary income under § 1250 of the Internal Revenue Code. The amount of recapture depends on the depreciation claimed on the property. Therefore, some portion of the gain will be subject to ordinary income tax rates, and some portion will be subject to capital gains tax rates.

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