@Mike9241 -- indeed, the K-1 Part II Box L shows Ending capital account = $0. And the $190 difference is on target. Everything you laid out above is correct. But my original question is a little more subtle, here it is again in a slightly expanded version:
My question is: are heirs responsible for their share of ALL unrecaptured section 1250 gains over the life of a partnership (in this case, $115)? In my mind, the heir should only be responsible for their share of the LLC's depreciation taken AFTER the inheritance ($10).
The killer for me is that the K-1 Box 9c shows $115. I don't know of a way to separate the pre-inheritance chunk ($105) from the post-inheritance one ($10). Entering $10 for K-1 Box 9c in TT does the trick, but that discrepancy will likely raise a flag at the IRS.
So -- unless I am missing something -- the bottomline is that the entire $115 portion of the overall gain is taxed at a higher rate than 'regular' capital gain rate of 15%. If the partnership had filed a 754 election, then Box 9c would = $10 and only that amount would be taxed at the higher rate.
I appreciate your time and effort replying to my question, @Mike9241
