The sale of real estate is generally treated as Section 1250 property. An investor may have to recognize ordinary income recapture when they dispose of a rental real estate investment.
Section 1250 property is generally depreciable real property. The Section 1250 rules for gains, losses, and depreciation recapture are different from personal property. This article discusses the basics of Section 1250 tax rules.
Real estate investors generally have to treat their rental real estate income as passive income subject to the passive activity loss (PAL) rules. The real estate professional election may be available to some investors. This article and video discuss the real estate professional election and how to qualify.
