Form 4797 Lines 25 to 32: Part III Recapture (2025 Return)

Updated October 18, 2026. Quick answer: Lines 25 to 29 take the line 24 gain and test it by property type: section 1245 on line 25, section 1250 on line 26, section 1252 farmland on line 27, section 1254 mineral property on line 28 and section 1255 on line 29. Lines 30 to 32 then total the gains, send the ordinary-income part to line 13 and send the rest to line 6 or Form 4684. The amounts come from the depreciation and cost records behind line 22.

Lines 25 to 29: one block per property type

Each block opens with a caption such as “If section 1245 property:”. Fill only the block that fits the property in each column. Lines 19 to 24, which feed these blocks, are on the lines 19 to 24 page.

Line 25: section 1245 property

The form asks for “Depreciation allowed or allowable from line 22” on line 25a and for “Enter the smaller of line 24 or 25a” on line 25b. The instructions define the property: “Section 1245 property is property that is depreciable” and then list what qualifies, starting with “Personal property.”. Read the whole list in the instructions before deciding that a property is in or out. Depreciation figures usually trace back to your Form 4562 history.

Line 26: section 1250 property

The instructions say “Section 1250 property is depreciable real property (other than section 1245 property).” They add “Generally, section 1250 recapture applies if you used an accelerated depreciation method or you claimed any special depreciation allowance, or the commercial revitalization deduction.” The form itself warns “If straight line depreciation was used, enter -0- on line 26g”, with an exception for a corporation subject to section 291. For some property you do not calculate this at all: “Section 1250 recapture does not apply to dispositions of the following MACRS property placed in service after 1986 (or after July 31, 1986, if elected).” For those properties you “are not required to calculate additional depreciation for these properties on line 26”. The instructions list those property types, so check that list for residential rental and nonresidential real property.

The sub-lines are captioned “Additional depreciation after 1975” (26a), “Applicable percentage multiplied by the smaller of line 24 or line 26a” (26b), “Additional depreciation after 1969 and before 1976” (26d), “Enter the smaller of line 26c or 26d” (26e), “Section 291 amount (corporations only)” (26f) and “Add lines 26b, 26e, and 26f” (26g). Line 26c is “Subtract line 26a from line 24.” For line 26a the instructions say “Additional depreciation is the excess of actual depreciation (including any special depreciation allowance, or commercial revitalization deduction) over depreciation figured using the straight line method.” For line 26b: “Generally, use 100% as the percentage for this line.” For line 26d: “Do not enter less than zero on line 26d.”

Line 27: section 1252 farmland

The form says “Skip this section if you didn’t dispose of farmland or if this form is being completed for a partnership.” The instructions explain the rule: “Gain from disposition of certain farmland is subject to ordinary income rules under section 1252 before the application of section 1231 (Part I).” Line 27b is “Enter 100% of line 27a on line 27b except as follows.” The exceptions are “80% if the farmland was disposed of within the 6th year after it was acquired.” “60% if disposed of within the 7th year.” “40% if disposed of within the 8th year.” and “20% if disposed of within the 9th year.” The last rule is “Skip line 27 if you dispose of such farmland during the 10th or later year after you acquired it.”

Lines 28 and 29: mineral property and section 1255

For line 28 the instructions say “you must recapture all expenses that were deducted as intangible drilling costs, depletion, mine exploration costs, and development costs under sections 263, 616, and 617.” That rule is for gain on property placed in service after 1986; the instructions treat earlier property separately, so read the paragraph. Line 28b is “Enter the smaller of line 24 or 28a”.

Line 29a: “Use 100% if the property is disposed of less than 10 years after receipt of payments excluded from income.” “Use zero if 20 years or more.” Line 29b: “enter the smaller of (a) line 24 reduced by the part of the gain treated as ordinary income under the other provision, or (b) line 29a.”

Lines 30 to 32: the totals

Line 30 reads “Total gains for all properties. Add property columns A through D, line 24”. Line 31 reads “Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13”. Line 32 reads “Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 33. Enter the portion from other than casualty or theft on Form 4797, line 6”.

A short illustration (computed illustration, not an IRS example): if line 30 were $30,000 and the only amount in line 31 were a line 25b of $12,000, line 32 would be computed as $30,000 minus $12,000, which is $18,000, and line 13 would show the $12,000. The lines that take the amounts next are on the lines 13 to 18 page, and the ordinary income side connects to the Form 4684 page.

Where the number comes from

Line 25a comes from line 22, and the smaller-of tests compare a line with line 24. The percentage and additional-depreciation amounts come from your depreciation records and the worksheets in the instructions. Lines 30 to 32 are totals of the property columns. The sale of the whole property is reported on the Schedule D or Form 8949 side for any gain not recaptured.

Where it goes next

Line 31 goes to line 13, and line 32 goes to Form 4797 line 6 or Form 4684 line 33 as quoted above. The Part III recapture connects to Part IV on the lines 33 to 35 page for a property whose business use dropped.

Edition and line numbers

This page reads the 2025 Form 4797, Sales of Business Property, and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form header says “Attach to your tax return.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently. The whole form is walked through on the Form 4797 line by line guide page.

Common mistakes

• Calculating additional depreciation on line 26 for exempt property. The instructions say you “are not required to calculate additional depreciation for these properties on line 26”
• Entering less than zero on line 26d. The instructions say “Do not enter less than zero on line 26d.”
• Skipping the farmland cutoff. The instructions say “Skip line 27 if you dispose of such farmland during the 10th or later year after you acquired it.”

Related: Form 4562, Form 4684, Schedule D, and Form 8949.

Sources

• Instructions for Form 4797, Sales of Business Property (2025): https://www.irs.gov/pub/irs-pdf/i4797.pdf
• Form 4797, Sales of Business Property (2025): https://www.irs.gov/pub/irs-pdf/f4797.pdf

Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.