### Question
How is the term recapture amount defined?


### Answer
The term **recapture amount** is defined in *26 U.S.C. § 467* as the following:

> the lesser of—



(A) the prior understated inclusions, or



(B) the excess of the amount realized (or in the case of a disposition other than a sale, exchange, or involuntary conversion, the fair market value of the property) over the adjusted basis of such property

#### Citation:
  - *26 U.S.C. § 467*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart C-Taxable Year for Which Deductions Taken**

