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conflicting entry suggestions for 4797 sale of partnership rental real estate

MrD1
Level 2

One instructs to enter depreciation recapture on both the "depreciation allowed" and "depreciation recapture amount" lines in the Form 4797 detail.  This leads to K-1 depictions of Ordinary income (Part III, line 1) and Net section 1231 gain (line 10). 

The other instructs to enter depreciation recapture on the "depreciation allowed" line only.  This leads to K-1 depictions of Unrecaptured section 1250 gain (line 9c) and Net section 1231 gain (line 10).  This seems to agree with 4797 line 26 instruction to (enter 0 on line 26g if straight line depreciation was used", which it was. 

Both show K-1 Stmt Z, UBIA of qualified property, but I can't locate the worksheet that calculated this.

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4 Replies 4
TaxGuyBill
Level 15

The second one is probably correct.

"Depreciation recapture amount" probably does not apply.  For real estate, "recapture" only happens if it used accelerated deprecation (something other than Straight Line).  So unless you have one of the less common situations where the real estate was allowed to use accelerated depreciation (such as Section 179 or something like that), there is $0 of "recapture".

MrD1
Level 2

Thanks, TaxGuyBill.  Do you know where I would find the worksheet for the UBIA calculation?

 

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TaxGuyBill
Level 15

Sorry, I'm a ProSeries user, so I can't help you there.  But hopefully a Lacerte user will come along and point you in the right direction.

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MrD1
Level 2

Thanks, I found it.

 

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