How to allocate unrecaptured 1250 gain for a Schedule K-1 (Form 1065) in Lacerte

This article will help you specially allocate unrecaptured Section 1250 gain from a disposition of business assets (Schedule K-1, box 9c), other than the profit sharing percentage entered in Screen 8, Partner Percentages.

Follow the steps below:

1. Go to Screen 29, Special Allocations.
2. Select Income (Sch. K-1, Boxes 1–11) from the left section menu.
3. Select Unrecaptured Section 1250 Gain.
4. Select Disposition of Business Assets. 
   • If this is from a K-1, use From Passthrough Entities in the same section.
5. Select the Allocation Method from the dropdown (Lacerte will default to amount).
6. Allocate the amount as per the partnership agreement.
   • If applicable, allocate the Section 1231 Gain(Loss); the unrecaptured section 1250 gain from a sale of business assets is a part of this gain.
7. To confirm the allocation, view Box 9c on the Schedule K-1 in the Forms tab.