Why is the 1250 gain not showing up on my 1040 anywhere? I see the 1250 gain showing up on part 3 line 19 of schedule D but if I look at my 1040 income section the 1250 is not listed - only the schedule D from line 15 is listed. Should line 6 on my 1040 not include the total of the 1250 gain and the 1231 gain? Can someone explain?
What happens here is there was a sale of depreciable property. All of the sale is reported on other lines; capital gain, Section 1231, etc.
Part of what was sold was what is known as Section 1250 property, real property. The law says that this property has a capital gain tax rate of 25% and that is why is it showing up on the capital gain (Sch D) worksheet. This will apply the correct rate for that portion of the property sold.
What happens here is there was a sale of depreciable property. All of the sale is reported on other lines; capital gain, Section 1231, etc.
Part of what was sold was what is known as Section 1250 property, real property. The law says that this property has a capital gain tax rate of 25% and that is why is it showing up on the capital gain (Sch D) worksheet. This will apply the correct rate for that portion of the property sold.
so as far as the 1040 income section goes, 1250 will not appear; rather the schedule D tax worksheet takes care of applying appropriate tax to the 1250 gain (income). Right?
So does this mean the Sect 1250 gain reported on a K-1 is a portion of the Section 1231? For instance, assume the 1231 shows $2,000 and the 1250 shows $800, is the $800 taxed at one rate and $1,200 ($2,000 - $800) taxed at a different rate? Or are both taxed in full at different rates?
Thanks