Recapture definition

The treatment as taxable income, of what would otherwise have been capital gain, is called recapture. It comes when you benefit financially from the sale of an asset that was previously treated to reduce your taxes. In this case, the government intends to "recapture" the value of that tax deduction.

If you sell or otherwise dispossess any assets that have been tax deducted through depreciation, expensing or amortizable, you may have to report all or some of any gain as ordinary income.