### Question
How does the law define previously unrecaptured depreciation?


### Answer
Under *26 U.S.C. § 1245*, **previously unrecaptured depreciation** is defined as:

> the amount of any deduction allowed or allowable to the taxpayer transferor for the depreciation of any contracts involved in such transfer

#### Citation:
  - *26 U.S.C. § 1245*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART IV-SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES**

