Depreciation Recapture
Definition
The US rule that when a depreciated asset is sold for more than its written-down value, the previously claimed depreciation is taxed, often at ordinary rates, rather than as capital gain.
Related Terms in US Tax
Home Office Deduction
A US deduction for the business use of part of a home, available to qualifying self-employed taxpayers using either a simplified square-footage method or actual expenses, subject to exclusive-use rules.
Employer Identification Number (EIN)
A federal tax identification number the IRS issues to US businesses for filing returns, hiring employees and opening bank accounts. It functions like a Social Security number for a business.
Form 7004
The US form a business files to request an automatic extension of time to file certain business income-tax returns. It extends the filing deadline but not the time to pay any tax owed.
Form 4562
The US form used to claim depreciation and amortization, including the Section 179 expense election and bonus depreciation, for assets placed in service during the year.
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