As Susan alluded to depends on your software on how to report. The recapture does not go on the 1065. It will flow to the K1 box 20 code L with a statement for how the partner will report the recapture. In ProSeries Pro you put the sale on the asset worksheet under dispositions, then you have to fill out a "Partners disposition report for all assets with 179 taken" Once that is done it will flow to the K1 for you.