Roger, an individual, sells an office building for $600,000 that has an adjusted basis of $60,000, resulting in a gain of $540,000. The original cost of the building was $500,000 and $440,000 of straight-line depreciation has been recorded. Roger will reclassify $440,000 (lesser of gain or depreciation) as unrecaptured 1250 gain. The remaining $100,000 (ie, $540,000 total gain - $440,000 unrecaptured 1250 gain) is Sec 1250 gain, treated as STCG Sec 179 gain, treated as ordinary gain Sec. 1231 gain, treated as a LTCG. Sec 1245 , treated as ordinary gain A wash sale occurs when an asset (eg, stock) has been sold at a loss and a substantially similar asset is purchased within 30 days before or after the sale. Such a loss is not deductible, but is carried forward for up to 5 years carried back for up to 5 years added to the basis of any other property purchased within the same time period. added to the basis of the repurchased asset