RTS1823
Level 3
‎12-07-2019 12:22 AM

I've searched but can't seem to find a straight answer, would depreciation recapture due to real property used in a business like a home office qualify for the QBI deduction or is it just depreciation recapture on business equipment, etc that counts?  Thanks!


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itonewbie
Level 15
‎12-07-2019 12:22 AM

If you are talking about unrecaptured §1250, it is taxed as capital gain and not eligible for QBI deduction according to the code and regulations.  If you're talking about recaptures that are ordinary income (e.g. §1245), it is then eligible to the extent it is attributable to a qualified trade or business.

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RTS1823
Level 3
‎12-07-2019 12:22 AM
Thank you.  Yes, I was talking about unrecaptured 1250 gain.
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TaxGuyBill
Level 15
‎12-07-2019 12:22 AM
Interesting, I didn't realize that (or forgot about it).  Do you offhand know where that is?  If not, I'll look for it later.
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itonewbie
Level 15
‎12-07-2019 12:22 AM
@TaxGuyBill They discuss that under IV.(A)(10) of the Final Regs and updated §1.199A-3(b)(2)(ii)(A).
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TaxGuyBill
Level 15
‎12-07-2019 12:23 AM
Thank you!
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itonewbie
Level 15
‎12-07-2019 12:23 AM
:smile::smile:
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Marc-TaxMan
Level 8
‎12-07-2019 12:23 AM

see: https://accountants-community.intuit.com/questions/1807329-how-to-flow-4797-gain-to-qbi-worksheet

right on point.

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