Section 179 recapture on sale of partnership asset.

[pbuckman]

Section 179 depreciation was elected for an asset purchased in 2020 and traded-in in 2024.  Purcahse price $57700, trade in value $47,000.  I believe I need to record the recapture of the depreciation and record the sale on form 4797, but don't see how/where to do this on the form.

[Terry53029]

The laws changed in 2018. What you have to do now is say that you sold the tractor and purchased a new one. Being that you took 179 on old asset the basis would be zero, and you sold it for $47000. The new one you just purchased it for $57700 that is basis for new one plus any cost

[sjrcpa]

What software are you using?

[Terry53029]

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.

[pbuckman]

I'm using Turbo tax for busines for the partnership and Pro Series Basic for the 1040.  For the 1040, I had overlooked a link from the K1, line 20 code L, to a form where I could reimpute the figures from the the partnership K1 regarding the transaction.  I thought there would be a recapture of the depreciation and then a calculation of gain/loss.  Duh, when you calculate the sales price as total gain, as is done on the 4797, it is the same thing.

[pbuckman]

Thank you.  In Pro seies, I had overlooked a link from the K1 to a page where I could enter the "Partner's Disposition Report for all assets with with 179 expense Taken" that was printed with the K1 from the partnership return. 

[pbuckman]

Thank you.  After posting, I found that I had overlooked a link below the K1 input screen that took me to a screen where I could input the figures from the "Partner's Disposition report for all Assets with Section 179 Expense Taken".