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I am using Becker as my study material but am supplementing Wiley and Yaeger videos for explanations.
The book says when dealing with 1250 property the deprection recapture is equal to the amount of the ordinary income under the general section 1250 rules plus 20% of the straight line deprectiaotn that was not recaptured under the general rule. However, there are no examples dealing with 1250 property in the Becker book! UGHH!
I used a Yaeger video as a supplement to this section because I needed more information. (https://www.youtube.com/watch?v=90tfQc7_P9Q).
It seems that Yaeger recaptures 20% of the deprectiaon taken as ordinary income and calls this a 291 recapture (which is mentioned nowhere in the Becker book!)
example 291 from the above video:
SP 50,000
Cost 20,000
Dep 4,000
AB 16,000
Gain 34,000
.2*4000=800 ordinary income
33,200 LTCG
example 1250 from above video:
SP 350,000
AB 200,000
Gain 150,000
Accel Dep 100,000
SL 70,000
Excess 30,000
1250 ordinary income 30,000
1230 LTCG 120,000
***There is no reference to the 20% that Becker speaks of***
Is there anyone who can explain the difference between 291 and 1250 depreciation recaptures and when to take this 20% of depreciation as ordinary income.
My test is in less than a week so any info would be of great help. Thanks!
REG (7/2/2012) - 81
BEC (8/29/2012) - 75
FAR
AUD (1/7/2013) - 89
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