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Depreciation recapture on Real Property eligible for QBI?

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Level 2

I've searched but can't seem to find a straight answer, would depreciation recapture due to real property used in a business like a home office qualify for the QBI deduction or is it just depreciation recapture on business equipment, etc that counts?  Thanks!


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Level 15

If you are talking about unrecaptured §1250, it is taxed as capital gain and not eligible for QBI deduction according to the code and regulations.  If you're talking about recaptures that are ordinary income (e.g. §1245), it is then eligible to the extent it is attributable to a qualified trade or business.

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Still an AllStar

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Level 15

If you are talking about unrecaptured §1250, it is taxed as capital gain and not eligible for QBI deduction according to the code and regulations.  If you're talking about recaptures that are ordinary income (e.g. §1245), it is then eligible to the extent it is attributable to a qualified trade or business.

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Still an AllStar

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Level 2
Thank you.  Yes, I was talking about unrecaptured 1250 gain.
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Level 12
Interesting, I didn't realize that (or forgot about it).  Do you offhand know where that is?  If not, I'll look for it later.
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Level 15
@TaxGuyBill They discuss that under IV.(A)(10) of the Final Regs and updated §1.199A-3(b)(2)(ii)(A).
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Still an AllStar
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Level 12
Thank you!
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Level 15
:smile::smile:
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Still an AllStar
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