Form 4797 to report current sale of sec 1231 property with a non-recaptured net sec 1231 loss from 2019

[diane10]

The amount of current year sec 1231 gain of $130000 is reported on line 7(lines 2-6), the non-recaptured net sec 1231 loss of $400000 from 2019 is reported on line 8, line 9 of form 4797 does not allow any part of the loss to apply to the gain on form 4797, line7.  My understanding of the IRS instructions, the gain should be applied to losses (if line 9 is zero, the amount on line 7 is the amount of net section 1231 loss recaptured). The form is not working that way.

My Form 4797 the gain of $130000 on line 7, has been entered on lines 12, 17, & 18b. The instruction for line 18b transfers the amount to 1040 Schedule 1, Part 1, line 4.This is added to taxable income.

Going to the carryover worksheet pg 2, line 16b, nets the sec 1231 to carryforward. (40000-130000)

What am I missing?