377. You Can't Escape Depreciation Recapture (But Here's How to Defer It)

Tax Smart Real Estate Investors Podcast · May 12, 2026 · 31m

What happens when you sell a rental property after taking depreciation deductions? Many investors are shocked to learn they may owe more than just capital gains tax. In this episode, Thomas Castelli and Nate Sosa break down how depreciation recapture actually works, including the three different tax “buckets” investors need to understand: Section 1245 recapture, unrecaptured Section 1250 gain, and Section 1231 capital gains. They explain how bonus depreciation, cost segregation studies, and qualified improvement property impact your taxes when you sell and why accelerated depreciation can…