In context
§1250 covers 27.5-year residential rental and 39-year nonresidential real property. The companion concept for personal property is §1245 property — see also the full recapture rules page for the disposition math.
The §1250 recapture rule is technical:
§1250 recapture = excess of accelerated depreciation over what straight-line would have produced
Under MACRS, real property uses straight-line — so accelerated equals straight-line, and the excess is zero. §1250 ordinary-income recapture for MACRS real property is almost always zero.
The depreciation taken on §1250 real property is instead taxed as “unrecaptured §1250 gain” under §1(h)(1)(E) and §1(h)(6). The maximum rate is 25% — between the long-term capital gains rate (20% top federal) and ordinary income (37% top federal).
The interplay with cost segregation: components reclassified into 5-yr, 7-yr, and 15-yr buckets are §1245 (ordinary recapture). The residual 27.5- or 39-yr structural basis remains §1250 (25% maximum). A cost-segregated property at sale therefore has a bifurcated recapture treatment — §1245 ordinary on the reclassified portion, §1250 / 25% on the residual.