06/09/2026
💰 Selling an investment property? Don't let this tax surprise catch you off guard.
Many real estate investors focus on appreciation and cash flow, but overlook one important factor when it's time to sell: depreciation recapture.
Here's what happens 👇
Over the years, the IRS allows investment property owners to claim depreciation deductions that can reduce taxable income. Sounds great, right?
But when you sell the property for a profit, a portion of those deductions may be "recaptured" and taxed—potentially at rates up to 25%.
🏡 Example:
If you purchased an investment property and claimed over $100,000 in depreciation, that amount could create an additional tax obligation when you sell.
The good news? With proper planning, there may be strategies available to help minimize the impact and maximize your investment goals.
Before selling an investment property, it's always wise to speak with your CPA, tax advisor, and real estate professional so you understand the full picture.
Source: RocketMortgage Learn Real Estate. Read more here: https://www.rocketmortgage.com/learn/depreciation-recapture
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Marisa Hold Steller PA
Keller Williams Realty Boca Raton | Keller Williams Luxury
Excellence in Every Detail.