The holding period is 8 years so that is not the issue. The Part I gain is all long term capital gain on the land and the part III gain is the combination of long term gain on the building and depreciation recapture. On Form 4797 in Turbotax the part III gain is combined with the part I gain on lines 7, 12, 17 and 18b. This gain then flows through to line 14 of the form 1040. None of the gain flows to the Schedule D.
