ExpertGlossary

When you recapture assets, you regain them, usually because of the provisions of a contract or legal precedent.

When a contract is involved, you may be entitled to recapture a percentage of the revenues from something you produce in addition to being paid the cost of producing it.

For example, a hotel developer might be entitled to recapture a portion of the hotel's profits. Most of the time, recapture works in your favor, but depending on the situation, it can also mean a financial loss.

A negative form of recapture occurs when the government makes you repay tax benefits that you've profited from in the past. For example, say that your divorce settlement calls for you to pay $150,000 to your ex-spouse over three years. If you pay all of the money in the first two years in order to qualify for a tax deduction, and pay nothing in the third year, the IRS may force you to recapture part of your deduction in the third year and pay taxes on it.