Where does a k-1 with unrecaptured 1250 gain and section 1231 gain appear on the 1040?

[leeesa]

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?

[Rick19744 · Accepted solution]

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.

[leeesa]

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?

[Rick19744]

Correct.

[leeesa]

Thanks so much!

[Rick19744]

You are welcome.

[dmjwoodlands]

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