TaxGuyBill
Level 15
07-11-2021
04:38 PM
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1250 gain is not part of 1231 gain, so the 1231 gain should not be reduced.
For example, let' say some real estate was purchased for $100,000, they took $5,000 in depreciation and it was sold for $120,000. In that scenario, there is $20,000 of 1231 gain (not $25,000).