Section 1250 is a part of the Internal Revenue Code, and it states that a gain triggered by the sale of depreciated real property should be taxed as ordinary income. This treatment as ordinary income is limited to the amount by which accumulated depreciation is greater than depreciation as calculated under the straight-line method. The amount of tax due for payment depends on the type of property and the duration of the ownership period. This Section is primarily applicable when the owner of real property has been depreciating it using an accelerated depreciation method.
Section 1250 is rarely applicable to the sale of real property today, since taxpayers have been required to depreciate their real estate holdings using the straight-line method since 1986.