iteracom

here's the explanation:

1. you buy a property
2. the property is assigned an "accounting depreciation" which is just an estimate. the final reduction in value once you sell the property will be different most likely
3. once you sell the property, if the book value of the property (cost - accumulated dep.) is less than the net sales price (sale price - selling cost), then this means your estimate of depreciation was too high. YOU MUST PAY THE TAX MAN BACK BECAUSE YOU CHEATED HIM IN PREVIOUS YEARS
4. the recaptured depreciation is the minimum of (book value - net sale price) or (accumulated depreciation)
5. the additional taxes you owe are (recaptured dep X tax rate)