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Business & farm
I won't comment on whether your software is correctly or incorrectly applying your K-1 information, but the key concept to understand is that "unrecaptured 1250" gain is a sub-category of "net 1231" gain. In other words, these are not mutually exclusive categories that are added together to obtain your total gain. Rather, the number in box 9c (unrecaptured 1250 gain) represents the amount of your 1231 gain that was categorized as unrecaptured 1250 gain. That's why they are the same number, i.e., all of your 1231 gain is categorized as unrecaptured 1250 gain and is therefore taxed at 25%.
This link provides a very comprehensive, but easy to follow, explanation:
March 19, 2023
8:52 AM