The 25% bracket is a special rate that relates to capital gains from Section 1250 property used in a trade or business.

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The 25% bracket refers to the special tax rate applied to the unrecaptured Section 1250 gain, which is part of the gain realized on the sale of Section 1250 property (real property) that has been depreciated. This rate is distinct from other capital gains rates.

The 25% Bracket Is a Special Rate That Relates to Capital