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Depreciation recapture might be the most overlooked tax trap in real estate and business sales. If you’re planning to sell real estate or a business, this video breaks down exactly how the IRS hits you with recapture tax, and what you can do to avoid it. I’ll walk you through: • What depreciation recapture really is • How the IRS taxes different types of property • The hidden risks with installment sales, cost seg, and short-term rental exits • Planning strategies that can offset or even eliminate the tax If you’re sitting on appreciated property, or you’re about to exit, I highly recommend watching this before you finalize any sale. Need help with your tax strategy? 👉 Apply to work with us: https://prosperlcpa.com/apply — I’m Mark Perlberg, CPA and Tax Strategist. I help business owners, real estate investors, and high-income professionals keep more of what they earn through advanced tax planning. No fluff, no hype, just straight facts. 00:00 - Intro: Why Depreciation Recapture Matters 00:25 - What It Is (And Why It's Taxed) 01:12 - The Truck Example Explained 02:01 - Recapture Rules for Real Estate 03:24 - 1250 Property: Capped at 25% 04:17 - 1245 Property: Fully Taxed 05:50 - The Cost Segregation Trap 06:55 - When the Short-Term Rental Exit Backfires 08:03 - Recapture & Capital Gains Stack Up 08:28 - Can 1031 Exchange Help? 09:40 - The Installment Sale Warning 10:55 - Why You Might Owe Before You Get Paid 11:21 - Why QOZ Funds Don’t Eliminate Recapture 11:46 - Charitable Trusts to the Rescue 12:14 - Using Other Losses to Offset 13:05 - Suspended Losses Explained 14:02 - Cost Seg on Other Properties = Big Win 15:06 - Using Sale Proceeds to Create New Deductions 16:09 - Debt Payoffs = No Write-Offs 17:01 - Hold Until Death? Step-Up in Basis 18:17 - Gifting to Parents? Proceed with Caution 18:43 - Final Pro Tips & Tax Strategy Summary 20:01 - Tax Rates Recap (1245 vs 1250) 21:01 - Ready to Reduce Your Taxes? Apply Now