Partnership LLC

[lwilliams2727]

I sold rental property for $260,000. Original cost was $220,000 and accumulated depreciation was $40,000.

Which gives me a capital gain of $80,000. $40,000 long term capital gain and $40,000 recapture ordinary income. K-1 line 9c shows $40,000  and line 10 shows $80,000 which is taxing me $40,000 too much. What did I do wrong?

Thanks for your help!

[Critter-3]

Nothing is wrong ... this is being reported correctly.   Box 9C simply indicates that part of the box 10 amount  is treated differently on the tax return.  Remember the K-1 is a collection of information being passed onto the partner.  Read the K-1 instructions. https://www.irs.gov/instructions/i1065sk1

Box 9c. Unrecaptured Section 1250 Gain

There are three types of unrecaptured section 1250 gain. Report your share of this unrecaptured gain on the Unrecaptured Section 1250 Gain Worksheet—Line 19 in the Instructions for Schedule D (Form 1040) as follows.

• Report unrecaptured section 1250 gain from the sale or exchange of the partnership's business assets on line 5.

• Report unrecaptured section 1250 gain from the sale or exchange of an interest in a partnership on line 10.

• Report unrecaptured section 1250 gain from an estate, trust, regulated investment company (RIC), or real estate investment trust (REIT) on line 11.

If the partnership reports only unrecaptured section 1250 gain from the sale or exchange of its business assets, it will enter a dollar amount in box 9c. If it reports the other two types of unrecaptured gain, it will provide an attached statement that shows the amount for each type of unrecaptured section 1250 gain.