Unrecaptured Section 1250 Gain

Definition

A tax category that applies to gains from the sale of depreciable real property, taxed at a maximum rate of 25% rather than the standard long-term capital gains rate. It represents the portion of gain attributable to depreciation previously taken on real estate, capturing the benefit of those deductions at a higher rate upon sale. CPAs must calculate this separately from regular capital gains to accurately project a client's tax liability on property dispositions.