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@Just-Lisa-Now- wrote:
I always include it, but Ive seen many preparers say they break it out....is there really any difference? I often wonder if Im missing something by not breaking it out separate.

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I don't think it is common, but in SOME cases it makes a difference, especially if the house was sold for less than the purchase price. (which is why the Instructions for 4797 say to break it up).

For example, let's say house was purchased for $400,000 ($300,000 building and $100,000 land) and took $60,000 of depreciation.

House sold for $360,000 ($270,000 building and $90,000 land).

Combined, you have $20,000 of Unrecaptured 1250 gain.

Breaking it up, house has $30,000 of Unrecaptured 1250 gain and $0 of 1231 gain.  Land has $10,000 1231 loss.  The 1231 loss creates that weird 1231 carryover.

There are probably better examples, but the difference primarily has to do with the 1231 gain/loss and carryover.