In which situation does a taxpayer need to recapture depreciation deductions?

A taxpayer needs to recapture depreciation deductions in various situations, indicating that they may have previously taken more tax benefits than allowed based on current use or sale conditions.

When the business use of listed property falls below 50%, the IRS requires recapturing some of the deductions previously claimed. This is because the asset was initially qualified for more favorable tax treatment based on higher usage in a business context.

Taking a Section 179 deduction and then seeing a decrease in business use triggers recapture as well. The Section 179 deduction provides for immediate expensing of certain property, but if the business use declines, the taxpayer must recapture some of that deduction as income, reflecting the diminished business purpose of the asset.

Finally, selling depreciable property at a gain can lead to depreciation recapture requirements. If the sale price exceeds the adjusted basis of the property (essentially the cost minus accumulated depreciation), any depreciation previously claimed must be recaptured and reported as ordinary income, rather than being treated as capital gains.

Given these scenarios, all present conditions under which depreciation recapture is applicable, making the comprehensive answer appropriate.