If you claimed depreciation on a rental or investment property, the IRS requires you to "recapture" that deduction at a 25% federal tax rate when you sell - regardless of your regular income bracket. This applies even if you didn't actually take the deduction but were entitled to. The recaptured amount is calculated on total depreciation claimed or allowable, whichever is greater, and can significantly reduce your net proceeds.
From the seller playbook: Depreciation Recapture Planning
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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