Can Form 4797 Deductions 2022-2023

Instructions and Help about Can Form 4797 Deductions

Hello and welcome to this lecture this is Professor Farhad in this session we would look at section 1245 recaptures so what is section 12 1250 not 1245 section 1245 in concept is very similar to section 1245 so if you don't understand what section 1245 is go back and review section 1245 basically we are recapturing depreciation as ordinary income when we sell a 1245 asset which is a personal property now section 12 50 silver in concept it's not the same otherwise you will not be covering it separately so the government it's a little bit nicer when it comes to real property so they want you to recapture with our special rules on how much are you going to recapture so depreciation recapture so depreciation recapture for section 1250 property only applies to depreciable real property and you're gonna see why that is residential rental real estate so residential rental real estate acquired before 1987 and you're gonna see why acquired before 1987 or non-residential real estate which is business commercial real estate acquired before 1981 and you're gonna see in a moment why those dates are important okay so think about it any property that was acquired before those states it's already fully depreciated it only applies to the to those so section 12 1250 around Lee applies since only the amount of additional depreciation is subject to recapture what is the additional depreciation the additional depreciation over the straight-line okay so to have additional depreciation the property must have used something some form of accelerated depreciation of hopefully you learned in tax one that we use for real property we use the straight-line so the only depreciation that we will need to recapture is the additional depreciation and access of the straight-line okay so to...