Amortization rebate is a tax provision that allows the IRS to levy taxes on any profitable sale of an asset that a taxpayer has used to offset taxable income previously.
Real estate depreciation returns are taxed at the taxpayer’s normal income tax rate, not at the more favorable capital gains tax rate.
Depreciation charges on property-related income are capped at a maximum of 25% for 2022.
In order to calculate the amount of depreciation recoverable, the adjusted cost of the asset must be compared with the selling price of the asset.