1231 and 1250 gains

[brian2390]

On the property sale screen, it has blanks for ordinary gain and 1250 gain.  Does the ordinary gain number also include the 1250 gain or list them separate and combined they equal my gain on the property sale?  

Example

Sale price                                                                      50,000

expenses                                                                         1,000

Adjusted basis after depreciation recapture         10,000

My gain is                                                                     39,000

of which Ordinary income is                                   34,000

1250 Gain                                                                    5,000

Does the ordinary income get reflected as the total gain on the sale of 39,000?

[AmeliesUncle]

Where are you entering this in the program?  It should walk you through things, not have you figure these things out.

Is this real estate?

Why do you think there is ordinary income?

What was your cost (purchase price plus any improvements)?

How much depreciation were you eligible to take?

[Rick19744]

Your facts don't make sense, so hopefully after addressing @AmeliesUncle questions, things will be clearer.

But to add some commentary, the section 1250 gain is not additional gain.  This is a portion of the gain that will be subject to a 25% tax rate (unrecaptured Section 1250 gain).

[brian2390]

adding more information:

Sold commercial rental real estate for 110,400 6/15/2022

purchase price was 75,000 on 8/1/1998

higher of depreciation allowed or taken over the 25 years was 45,685 

 (depreciation was 1,923/year because land cost was included in error).

Doing the math for the K1 I show the following:

Sold for 110,400

Adjusted basis  29,315 (75,000 cost less 45,685 depreciation)

Sub-Total   81,085

selling cost    970

Gain           80,115

on the K1 I completed I listed in box 9c  45,865 unrecaptured 1250 gain

on the K1 I completed I listed in box 10 - net section 1231 gain 80,115

is that correct?

The second question:

when bringing that information into my personal 1040 return

Under the K1 information, I clicked disposed of property

Sale Price              110,400

Selling Expense           970

Partnership Basis   29,315

There are then 2 boxes

one says ordinary gain

the second says 1250 gain

under 1250 gain I put 45,685

for the ordinary gain do I list the complete gain on the transaction of 80,115 or subtract the 1250 gain and list 34,430 which is 80,115 less 45,685?  In other words does Turbo Tax do the math for me where the tax is

1250 math 45,685  x  .10* = 4,569 (*rate is 25% less 15% already accounted for in 1231 math)

1231 math 80,115 x .15  =  12,017

Total                                         16,586

or

is the math

1250 math 45,685 x .25 = 11,421

1231 math 34,430 x .15 =   5,165

Total                                       16,586

I'm trying to figure out the flow through the return so I'm not double counting the gain.  I think I list the 80,115 but want to make sure.

Thanks 

[Mike9241]

those numbers don't appear to be correct unless there was personal property involved which could result in section 1245 recapture which is taxed as ordinary income. with personal property only the the sales price in excess of the original tax basis would be capital gain.  with the sale of real property  generally all depreciation taken is recaptured as 1250 gain which has special taxation any excess is capital gain 

[AmeliesUncle]

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@brian2390 wrote:

on the K1 I completed I listed in box 9c  45,865 unrecaptured 1250 gain

on the K1 I completed I listed in box 10 - net section 1231 gain 80,115

is that correct?

The second question:

when bringing that information into my personal 1040 return

Under the K1 information, I clicked disposed of property

Yes, that sounds correct.

Disposed of the property?  I don't know exactly what the screen is asking, but I think it is asking if you disposed of your Partnership Interest, not any property that was already reported on the K-1.  Again, I can't be entirely sure, but I suspect that is the case so you may want to read that screen a bit more carefully.