Depreciation Recapture on a Truck: What Happens When You Sell After Section 179

Section 179 lets you deduct the full cost of a work truck in year one — and the tax code has a memory. When you later sell that truck, Section 1245 depreciation recapture converts your gain back into ordinary income, up to the amount you deducted. It is not a penalty; it is the other half of the deal. Here is how it works, with a worked example using the 2026 $32,000 heavy-SUV cap.

The core rule: the IRS takes back what it gave

Every dollar of Section 179 or bonus depreciation you claim reduces your adjusted basis in the truck. When you sell, your gain is the sale price minus that reduced basis — and under §1245, the recaptured amount is the lesser of:

1. The total depreciation you claimed (Section 179 + bonus + regular), or
2. Your gain on the sale (sale price minus adjusted basis).

That recaptured amount is taxed as ordinary income — at your marginal rate, up to 37% for individuals — and reported on Form 4797, Part III. Only gain above your prior depreciation gets capital-gain treatment. Trucks hold their value well, so in practice most or all of the gain on a Section 179 truck ends up recaptured.

Worked example: $80,000 SUV, sold in year 3

You buy an $80,000 heavy SUV in 2026, 100% business use:

• Section 179: $32,000 (the heavy-SUV cap)
• Bonus depreciation: 100% of the remaining $48,000 = $48,000
• Total first-year deduction: $80,000 — adjusted basis drops to $0

In 2029 you sell it for $50,000. Your gain is $50,000 − $0 = $50,000. Recapture is the lesser of $80,000 (depreciation taken) or $50,000 (gain) — so the entire $50,000 is taxed as ordinary income. Had you sold it for $85,000, the first $80,000 would be ordinary income and only the last $5,000 would be capital gain. And if you sold for $45,000 after more depreciation? There is no gain at all — recapture only applies to gains.

The heavy-SUV cap cuts both ways

Here is the silver lining of the $32,000 SUV cap: it limits your deduction, but it also limits your recapture exposure on the Section 179 portion. You can never recapture more than you actually deducted. Compare a qualifying pickup with a 6-foot-plus bed — exempt from the cap — where the full $70,000 purchase price could be expensed in year one and the full amount is exposed to recapture on sale. See which trucks clear the 6,000-lb line before you buy.

The other trigger: business use drops to 50% or less

You do not even have to sell to trigger recapture. Section 179 requires more than 50% business use in the placed-in-service year, and if business use falls to 50% or less in any year during the recovery period, you must recapture the excess depreciation as ordinary income: the Section 179 deduction you claimed, minus the depreciation that would have been allowed on a straight-line basis all along. It goes on Form 4797, Part IV, and your basis goes back up by the recaptured amount. Keep a mileage log — business-use substantiation is what stands between you and this surprise.

Three ways to plan around recapture

• Time the sale. Recapture is taxed in the year of sale. Selling in a lower-income year — or after retirement — can cut the rate on the recaptured amount.
• Run the truck longer. Every extra year of service is another year of business use for the same upfront deduction. Recapture does not grow with time; it is capped at what you deducted.
• Do not confuse recapture with a loss of the benefit. You still got the time value of the deduction — an $80,000 write-off in 2026 is worth far more than the same dollars spread over five years, even if some comes back as ordinary income on sale. Model it in financing vs. tax savings before deciding the deduction “wasn’t worth it.”

Rules verified September 2026 against Source Advisors’ §1245 guide, David French CPA, and Blue J’s Section 179 recapture analysis (Form 4797 Parts III and IV). The $32,000 heavy-SUV cap and $2,560,000 Section 179 limit are 2026 figures. This guide is for educational purposes and is not tax advice.