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You will have a loss, and it's a section 1231 loss so it will be ordinary not capital. This is good because it will offset your other income :-)
Your basis in the property is $220,000 + $15,500 - $25,000 = $210,500
Your loss is $120,500
There is no depreciation recapture because there is no gain.
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Will the $120,500 loss offset my pension income and/or withdrawals from my Traditional IRA? Or will the remaining portion of the loss carry over to 2014, 2015, 2016?