Why does §1250 recapture generally no longer apply?
A) Congress repealed the code section.
B) The Tax Reform Act of 1986 changed the depreciation of real property to the straight-line method.
C) §1245 recapture trumps §1250 recapture.
D) Because unrecaptured §1250 gains now apply to all taxpayers instead.
E) None of these.

Question

Quizplus · Accepted Answer

The Tax Reform Act of 1986 changed the depreciation of real property to the straight-line method, which effectively eliminated the need for §1250 recapture in most cases. This is because §1250 recapture is only triggered when there is a gain on the sale of real property that has been depreciated using an accelerated method, which is no longer allowed under the straight-line method.

Why Does §1250 Recapture Generally No Longer Apply