SmartHelping / Accounting & Asset Sales / Excel
Depreciation Recapture
Analyze how depreciation and an asset sale flow through book value, recapture and gains or losses. Use a period-by-period Excel schedule to review the calculations and bring recapture analysis into your financial modeling work.
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See the model in action
Follow the depreciation recapture calculations.
Watch the walkthrough and update to see the accounting tool in use. Open the workbook screenshot below to review the schedule and its calculation columns.
Inside the Excel workbook
Follow the inputs through to recapture and gain/loss.
The schedule brings the asset assumptions and calculation outputs together for review across periods.
Initial cost basis
Start with the initial cost basis used in the asset analysis and review it alongside the rest of the schedule.
Depreciation expense per period
Enter depreciation expense per period and follow the resulting book-value calculation through the schedule.
Net sale proceeds
Set net sale proceeds for the periods being analyzed and compare the sale assumptions with the modeled book value.
Maximum recapture and recapture
Review separate maximum recapture and depreciation recapture columns to follow the workbook’s calculation logic.
Capital gain or loss
Review the capital gain/loss column alongside depreciation recapture to understand how each contributes to the modeled sale outcome.
Results after modeled offsets
Review the net result columns after modeled offsets, together with the underlying recapture and gain/loss calculations.
Understanding the tax context
Keep the calculation and the tax classification in view.
Tax treatment depends on the property and the taxpayer’s circumstances. Review the rules applicable to your sale alongside the workbook.
Adjusted basis and gain or loss
Tax gain or loss generally compares the amount realized, after selling expenses, with adjusted tax basis. Depreciation and other basis adjustments matter; reconcile the workbook’s book value to your tax records. See IRS Publication 544.
Section 1245 property
For Section 1245 property, such as equipment, recognized gain is generally ordinary income up to depreciation allowed or allowable. See the Section 1245 discussion in IRS Publication 544.
Section 1250 property
Section 1250 ordinary recapture generally concerns additional depreciation. Unrecaptured Section 1250 gain is a separate category and can carry a maximum 25% federal rate for individuals. See IRS Publication 544 and IRS Topic 409.
Confirm asset classification, netting rules and applicable tax treatment with your tax professional before using the results for a return.
How to use the model
Work from the asset assumptions to the sale analysis.
Review the example
Start with the video and screenshot to understand the schedule, the input columns and the recapture and gain/loss outputs.
Enter cost basis and depreciation
Set the initial cost basis and depreciation expense per period for the asset you are analyzing.
Set the sale assumptions
Enter net sale proceeds for the periods under review and follow their effect through the book-value and sale calculations.
Review the results
Compare maximum recapture, depreciation recapture, capital gain/loss and the net results after modeled offsets. Review the assumptions before incorporating the analysis into a broader model.
Who this model is for
For accountants and financial modelers working through asset sales.
Accountants and analysts
Review the relationship between depreciation, book value, sale proceeds and the model’s recapture and gain/loss calculations in one schedule.
Financial model builders
Use the workbook as a reference when working through depreciation recapture logic for asset-sale assumptions in a larger financial model.
Also available in these bundles
Need more accounting or real estate analysis tools?
This template is included in the Accounting and Real Estate bundles. The Super Smart Bundle provides access to the complete public SmartHelping template collection.
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Questions before you buy
A few useful details.
What does this workbook help analyze?
It provides an Excel schedule for reviewing depreciation, book value, net sale proceeds, depreciation recapture and capital gain/loss, including the workbook’s net calculations after modeled offsets.
Can I preview the calculation layout?
Yes. Watch the walkthrough and open the model screenshot above to inspect the inputs and calculation columns before purchasing.
Is this template included in a bundle?
Yes. It is included in the Accounting and Real Estate bundles. You can also access the complete public template collection through the Super Smart Bundle.
How is the template delivered?
The Excel template is available for immediate download after purchase.
Work through the asset-sale calculation
Bring depreciation recapture into your analysis.
Get the Depreciation Recapture Financial Model for $45 and review the schedule in Excel.
