Unrecaptured Section 1250 gains are carrying to schedule K on the partnership return when there should not be any?

Forum|Forum|4 years ago
January 20, 2022
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Best answer by TaxGuyBill

@IFB wrote:

I entered -0- on line 26g because there should be no recapture of depreciation, but the program still puts the whole amount of the capital gain on the Schedule K, and then on the K-1's under both unrecaptured 1250 gain and section 1231 capital gain.

Line 26g is for "recapture" (depreciation in excess of straight-line). That is completely different than "Unrecaptured Section 1250 Gain" (gain due to the basis reduction using straight-line depreciation).

So if you had straight-line depreciation and if you had a gain on 1250 property, you SHOULD have Unrecaptured Section 1250 Gain on the K-1.

T

TaxGuyBill

Level 15

So you did NOT report the sale of any real estate?

I

IFBAuthor

Level 2

Yes, I did report a sale on Part III of form 4797 on the partnership return. I entered -0- on line 26g because there should be no recapture of depreciation, but the program still puts the whole amount of the capital gain on the Schedule K, and then on the K-1's under both unrecaptured 1250 gain and section 1231 capital gain.

T

TaxGuyBillAnswer

Level 15

@IFB wrote:

I entered -0- on line 26g because there should be no recapture of depreciation, but the program still puts the whole amount of the capital gain on the Schedule K, and then on the K-1's under both unrecaptured 1250 gain and section 1231 capital gain.

Line 26g is for "recapture" (depreciation in excess of straight-line). That is completely different than "Unrecaptured Section 1250 Gain" (gain due to the basis reduction using straight-line depreciation).

So if you had straight-line depreciation and if you had a gain on 1250 property, you SHOULD have Unrecaptured Section 1250 Gain on the K-1.

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