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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Sold a low income 1250 property and need to recapture the

Customer Question

sold a low income 1250 property and need to recapture the depreciation which is $1,300,000, whereas our accumulated losses at the partner's level is $ 850,000 meaning there's 450,000 more in income than the partner's were allowed as a deduction over the 27 years of ownership. Can I show the 850,000 as the recapture amount on form 4797, instead of the 1,300,000 ?
Bob Hall
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Hi Bob and welcome to our site!
The partner would need to report the full amount of depreciation recapture and

separately will deduct previously disallowed losses on schedule E.
As your dispose the entire passive activity - there will not be any passive loss limitation for all previously disallowed losses.

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