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What happens when I sell an asset I have already depreciated?

Bookkeeping & accounting basics

Gain up to the depreciation previously claimed is generally recaptured and taxed as ordinary income rather than capital gain.

That surprises people who expected capital gains treatment on equipment. The depreciation reduced ordinary income earlier, so the recapture reverses it.

We handle this for founders running US companies.

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Check your EIN confirmation letter (CP 575) first. If that is gone, look at a previously filed tax return, a business bank account application, or any 1099 you have issued. Your bank or your payroll provider will also have it on file.

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