When you sell certain property, whether personal or real estate, that you have depreciated, and have received a benefit from that depreciation, the tax law may require you to report part of your income (equal to the depreciation you have taken and benefited from) as ordinary income taxed at a higher level than the capital gains tax rate. This is called the recapture of depreciation. Consult your tax advisor as to the possibility of depreciation recapture because it may make a big impact on your after-tax income. In certain circumstances, you may be able to “roll over” your gain on real estate through a 1031 exchange, which can defer your gain further into the future.