751 gain or loss

[mjain135]

Hello everyone! How should I input Section 751 gain (Code 20AB ON K-1) on individual module? is there any link where I can find step by step instruction to input the 751 gain  in Lacerte?

The cost basis of the sold units is not reported to the IRS but the broker provided the cost basis in the attachment to 1099-B. The cost basis provided by the broker  is different from what it is reported on sales schedule. Should I ignore the cost basis provided by the broker and just use the one stated on Sales schedule?

Thanks for your help!

[PhoebeRoberts · Accepted solution]

Publicly traded partnership? You (someone) should be maintaining a basis schedule for the partnership investment. In my experience, if the units were bought and sold through a broker (as opposed to transferred around, inherited, etc), the PTP sales schedule is correct.

I enter a Sch D transaction for the 751 gain with basis = proceeds and accumulated depreciation equal to both of them (and adjusted AMT accumulated depreciation to make the AMT adjustment right), but anything that gets you to Part II of the 4797 is good enough.

I think lots of people enter it in the K-1 input screen under Line 11 as "Ordinary gain to be reported on 4797 Line 10." I find that the "From K-1" memo that produces, and the presentation on the basis schedule, to make it harder for me to tie out more complex returns, but for a straightforward return, it's quick and easy.

[mjain135]

Thank you so much for your response. 

So, I did the following:

On Disposition screen, I entered:

Proceeds as stated on 1099-B

Cost Basis - 0 as stated on 1099-b

On K-1 screen- line 11- I entered 751 gain subject to recapture- which flows to 4797 line 10 as you mentioned.

And, where do I report the outside cost basis reported on sales schedule of k-1?

[PhoebeRoberts]

Ignore the 1099-B basis. Use the Sales Schedule on the K-1 to determine the portion of gain that's capital gain. Proceeds per 1099-B minus capital gain per Sales Schedule equals basis for the capital gain piece of the sale.