Section 179 recapture is reported on IRS Form 4797 page 2 Part IV.
Q1 This appears to be the correct choice.
Q2 Section 179 recapture does not apply to rental property. This IRS publication page 17 states:
You cannot elect the section 179 deduction for the following property:
- Certain property you lease to others (if you are a noncorporate lessor).
Depreciation allowed or allowable is recaptured on sale of the asset. See IRS Form 4797 page two Part III line 23.
Q3 Does your 2021 Federal 1040 tax return include IRS Form 4797? If so, the sale of the land is reported on page one Part I and the sale of the improvements are on page two Part III.
You may also be seeing personal property items used in the rental property.
2017 Tax Cuts and Job Act permitted landlords to use section 179 to deduct the cost of personal property items they purchase for use inside rental units, for example, kitchen appliances, carpets, drapes, or blinds.
[Edited 3/8/22 10:42 AM PST]
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