What is "depreciation recapture"?

A Taking extra depreciation

B Taxing as ordinary income the gain attributable to prior depreciation deductions when an asset is sold

C A depreciation method

D Reversing depreciation errors

✓ Correct Answer: Option B

When a depreciated asset is sold for more than its depreciated value, the depreciation benefit is recaptured as ordinary income.

💡 Why is B) the correct answer?

The correct answer to the question "What is "depreciation recapture"?" is Option B: Taxing as ordinary income the gain attributable to prior depreciation deductions when an asset is sold.

The other options — A) Taking extra depreciation, C) A depreciation method, D) Reversing depreciation errors — are incorrect for this CPA Exam Prep question. As explained above: When a depreciated asset is sold for more than its depreciated value, the depreciation benefit is recaptured as ordinary income.

📚 About This CPA Exam Prep Practice Question

This 3-level CPA Exam Prep question from the Regulation (REG) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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What is "depreciation recapture"?

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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