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Investments glossary

Unrecaptured Section 1250 Gain

Unrecaptured section 1250 gain is an Internal Revenue Service (IRS) tax provision where previously recognized depreciation is recaptured into income when a gain is realized on the sale of depreciable real estate property. Unrecaptured section 1250 gains are taxed at a maximum 25% tax rate, or less in some cases, as of 2019.1 Unrecaptured section 1250 gains are calculated on a worksheet within Schedule D instructions, and they are reported on the Schedule D and carried through to the taxpayer’s 1040.2

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