Taxes on Passive Investment Activities

Upon sale of an investment property (as a passive investment activity), different tax rates apply towards different elements of the property:

Ordinary Income
- Personal property depreciation

Long-term capital gains
(15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets )
- Building / improvement depreciation

Short-term capital gains (Ordinary income tax rates up to 35%)
- Everything else