Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Total recapture tax due
$24,390
Section 1245 tax (ordinary rate)
$8,640
Section 1250 tax (25% cap)
$15,750
1245 depreciation amount
$27,000
1250 depreciation amount
$63,000
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How to use this
- 1Enter total depreciation claimed ($).
- 2Enter % of depreciation from reclassified (1245) assets (%).
- 3Enter your ordinary income tax rate (%).
- 4Read your total recapture tax due on the right — it updates as you type.
- 5Hit Share to keep the scenario or send it to someone.
About this calculator
When a cost segregation study reclassifies part of a building into short-life personal property, that reclassified portion becomes Section 1245 property while the building shell remains Section 1250 property, and the two are recaptured differently on sale. Section 1245 property recaptures all depreciation taken as ordinary income, no matter how long you held it. Section 1250 real property recaptures at a maximum 25% federal rate as unrecaptured Section 1250 gain, capped at the actual depreciation claimed. This calculator splits your total depreciation taken between the two buckets based on the percentage of basis that was reclassified through cost segregation, then estimates the tax due on each bucket separately using your ordinary rate for the 1245 piece and the 25% cap for the 1250 piece. This is the number that shows why aggressive cost segregation, while valuable for near-term cash flow, can shift more of your eventual recapture into the higher ordinary-rate bucket rather than the capped 25% bucket, which matters when planning your exit and whether a 1031 exchange makes sense.
Worked example
Using the values the calculator loads with:
Inputs
- Total depreciation claimed: 90000 $
- % of depreciation from reclassified (1245) assets: 30 %
- Your ordinary income tax rate: 32 %
Results
- Total recapture tax due: $24,390
- Section 1245 tax (ordinary rate): $8,640
- Section 1250 tax (25% cap): $15,750
- 1245 depreciation amount: $27,000
- 1250 depreciation amount: $63,000
What each field means
Inputs
- Total depreciation claimed ($)
- The total depreciation claimed used in the calculation, measured in $. Starts at 90000 $ so you have a working example on load.
- % of depreciation from reclassified (1245) assets (%)
- The % of depreciation from reclassified (1245) assets used in the calculation, measured in %. Starts at 30 % so you have a working example on load. Accepted range: 0–60 %.
- Your ordinary income tax rate (%)
- The your ordinary income tax rate used in the calculation, measured in %. Starts at 32 % so you have a working example on load. Accepted range: 0–37 %.
Results
- Total recapture tax due
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Section 1245 tax (ordinary rate)
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Section 1250 tax (25% cap)
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- 1245 depreciation amount
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- 1250 depreciation amount
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Why does 1245 property get taxed worse than 1250?
Congress designed Section 1245 to fully recapture depreciation on personal property (equipment, appliances, carpet) at ordinary rates since these assets typically don't appreciate, so any depreciation deduction was purely a timing benefit that should be fully clawed back. Real property under 1250 gets the gentler 25% cap because land and buildings can genuinely appreciate, mixing real economic gain with the depreciation deduction.
Does cost segregation increase my total tax bill?
Not necessarily — it accelerates deductions into earlier years (a time-value-of-money win) but doesn't change your total lifetime depreciation. The tradeoff is a higher proportion of eventual recapture falling into the higher-taxed 1245 ordinary-income bucket rather than the capped 1250 bucket, which this calculator quantifies.
Can a 1031 exchange defer both types of recapture?
Yes, a properly structured exchange defers 1245 and 1250 recapture along with capital gains, as long as replacement property includes enough like-kind personal property value to avoid boot on the 1245 assets specifically — a nuance often missed since 1245 property must generally be exchanged for like-kind 1245 property under current rules for full deferral.
Where do I find my reclassified percentage?
Your cost segregation study report will show the dollar amount and percentage of basis allocated to 5, 7, and 15-year property versus 27.5/39-year real property. Use that reclassified percentage from the study rather than guessing.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Depreciation Recapture on Sale Calculator
Split your sale gain into recapture tax and long-term capital gains tax.
Cost Segregation First-Year Benefit Calculator
Estimate accelerated depreciation and first-year tax savings from a cost seg study.
1031 Exchange Boot and Basis Calculator
Estimate taxable boot and new cost basis on a like-kind exchange.
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). 1245 vs 1250 Property Split Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/sec-1250-vs-1245-property-split
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/sec-1250-vs-1245-property-split" target="_blank" rel="noopener">1245 vs 1250 Property Split Calculator — RevenueLab</a> (2026).</p>
Source: [1245 vs 1250 Property Split Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/sec-1250-vs-1245-property-split) (2026).