FTL$-46.$ A client inquires about the tax implications of selling their rental property. They purchased the property in $2010$ for $$200,000$ and have been claiming depreciation deductions throughout their ownership. They are expecting to sell the property for a significant profit.

They will owe a higher capital gains tax rate due to the depreciation deductions claimed

There are no additional tax considerations beyond capital gains taxes

They will need to pay a penalty for claiming depreciation on a rental property

They may be subject to depreciation recapture, which could increase their taxable income