Depreciation Recapture: The Tax Most Real Estate Investors Forget

In this video, we explain one of the most misunderstood aspects of real estate investing: depreciation recapture. Many investors appreciate the benefits of depreciation while they own a property. However, when that property is sold, depreciation recapture can create a significant tax liability that often surprises investors. We discuss how depreciation recapture works, how it differs from capital gains, and why understanding these numbers before selling is critical. We also explain how Section 1031 is commonly evaluated as part of broader tax planning when investors are transitioning from one investment property to another. Knowing the tax consequences before a sale occurs can help investors make more informed decisions and avoid unexpected surprises. Want to learn more? I'm always happy to answer any questions you or your clients may have about how to best leverage DSTs during a 1031 exchange to maximize your investment goals! www.1031Financial.com/Contact #DST #1031Exchange #RealEstateInvesting Disclosure: DST investments are speculative, illiquid and can expose investors to risks including the potential loss of the entire investment principal, potential property value loss, foreclosure and loss of management control. Past performance is not a guarantee of future results. Securities offered through 1031 Securities Inc., member FINRA / SIPC. 1031 Securities Inc. and 1031 Financial are unaffiliated. See “About” or “Intro” for further details.

Added 25 Jun 2026