Excess Accelerated Depreciation

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Excess Accelerated Depreciation

Excess Accelerated Depreciation means:
the accumulated difference between the accelerated depreciation claimed for tax purposes and what the straight-line depreciation would have been. Generally, excess accelerated depreciation is recaptured (taxed) as ordinary income upon a sale, instead of receiving more favorable capital gains treatment. See also depreciation recapture.

Note: Since the Tax Reform Act of 1986, the significance of accelerated depreciation has diminished because only straight-line depreciation may be claimed for real estate acquired since then.

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.

Description and Definition of Excess Accelerated Depreciation

The difference between the total depreciation you have taken since you acquired the property and the depreciation you would have taken if you had used the straight-line depreciation method. This is calculated upon the sale or disposition of property.


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