# Depreciation Recapture

*Taxes — Finicade finance glossary*

Depreciation recapture taxes back the depreciation deductions you claimed when you sell the asset, at rates up to 25% for real estate. It exists because depreciation lowered your cost basis, inflating the gain — you got a deduction against ordinary income and would otherwise pay only capital gains on the reversal. It applies whether or not you actually claimed the depreciation, which catches out landlords who skipped it.

**Also known as:** recapture tax, section 1250 recapture

**Related terms:** [Depreciation](https://finicade.com/glossary/depreciation), [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [1031 Exchange](https://finicade.com/glossary/1031-exchange), [Cost Basis](https://finicade.com/glossary/cost-basis), [Rental Property](https://finicade.com/glossary/rental-property)

Source: https://finicade.com/glossary/depreciation-recapture