💰 CPA Exam Prep

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.

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