When entering the sale or disposition through Screen 22, Depreciation, Lacerte and ProConnect Tax uses the Depreciation Method entered to determine what type of property the asset is.
Follow these steps to enter Section 1250 depreciation recapture in the Individual module:
- Go to Screen 22, Depreciation.
- Click Add from the left navigation panel.
- If using ProConnect Tax, click the Details button.
- Under the Depreciation (4562) section, enter the Description of Property.
- Scroll down to the Asset Information section.
- Under the General Information subsection, fill out the applicable fields.
- Under the Regular Depreciation subsection, fill out the applicable fields.
For the Depreciation Method, the program doesn't recapture depreciation for section 1250 real property (85, 87) or straight-line methods (71, 81, 89, 83). For ACRS accelerated real property methods (70, 80, 82), the program recaptures the excess of accelerated depreciation over straight-line. Check out this article for information on depreciation methods.
Commonly asked questions about Section 1250
What types of assets qualify for Section 1250 depreciation recapture?
Section 1250 depreciation recapture applies to depreciable or amortizable properties disposed of at a gain. The amount of gain treated as ordinary income is calculated based on how long the property was held.
Realty properties purchased after 1986 aren't eligible for Section 1250 depreciation recapture. Refer to this IRS resource for more information about Section 1250 depreciation recapture.
