\$1231 Asset with Depreciation - Real Property owned by Individual subject to $1250 recapture (max 25% rate on unrecaptured depreciation gains) Teton bought its warehouse for $325,000, depreciated it $25,000, and sold it for $475,000. What is the amount and character of the gain Teton (and thus Steve) reports on the sale (recall that income of sole proprietorships is taxed directly to the owner of the business)? What if: Suppose Steve's marginal ordinary tax rate is 35 percent, and he faces a preferential rate of 15 percent. What amount of tax will he pay on the gain (assuming no other asset dispositions)