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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6176
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I have a final K-1 one with 9c Unrecapured section 1250 gain

Customer Question

I have a final K-1 one with 9c Unrecapured section 1250 gain and 10. Net section 1231 gain entered statement. I have a final distribution on the LLC that was dissolved. My final distribution is less then my adjusted capital account. Do I use form 4797 to report the gain and the 8989 to report the loss?
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Customer: no
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Submitted: 8 months ago.
Category: Tax
Expert:  Stephen G. replied 8 months ago.
If you change 8989 to 8949, then the answer is yes.
Customer: replied 8 months ago.
Sorry I meant 8949. The net section 1231 gain is 24,782 which goes on the 4797. I have a unrecaptured section 1250 gain of 25,749. Where does that go?
Expert:  Stephen G. replied 8 months ago.
As stated in the partner's instructions, there are 3 types of Section 1250 Unrecaptured gain.If the partnership didn't furnish any Supplementary Information, and just reported the number for the 1250 gain, then the figure goes on Line 5 of the worksheet for Schedule D for Section 1250 Unrecaptured gain, in the Instructions to Schedule D. Here's the heading on the Worksheet:Unrecaptured Section 1250 Gain Worksheet—Line 19Let me ask you this. Are you using a tax preparation program to complete you tax return?If so, you should have input for the K-1 that corresponds to these lines on the K-1.If you are trying to do your return "by hand" without a program, you better lock yourself in to a padded room for the duration.
Customer: replied 8 months ago.
The accountant who did the k-1 says I only pay tax on line 10. I called three different accounts and have gotten three different answers. In your opinion am I paying tax on both line 9 and 10?
Expert:  Stephen G. replied 8 months ago.
Honestly, I believe that is correct, but I'd want to work through the worksheet to make sure I'm not missing something; So I don't like to give "off the cuff" answers. Was it a CPA who prepared the K-1 for the Partnership. It sounds like you haven't done the figuring yourself?
Customer: replied 8 months ago.
Yes. Big firm.
Expert:  Stephen G. replied 7 months ago.
Well, this should be pretty easy to figure out once your return is done:"The accountant who did the k-1 says I only pay tax on line 10."I presume you're using a tax preparation program to do your return.
Customer: replied 7 months ago.
No. Doing taxes myself.
Expert:  Stephen G. replied 7 months ago.
Well, it's hard to say if that is smart without knowing about your tax situation and investments, number of K-1s, etc. But that is a difficult project these days so using a Turbo-Tax or even an H&R Block or Tax Act or one of the many other programs, is money well spent given the relatively low cost involved and the complexity of tax returns these days. There are so many ways to screw up things with passive losses, at-risk rules, the alternate minimum tax & the way the IRS runs everything through their computers, personally I don't want my return being "kicked out" for some stupid mistake I make by not handling something correctly and my return is pretty simple these days.Steve G.
Customer: replied 7 months ago.
I know. That's why I'm asking the question to you guys who are tax professionals and paying the fee.
Expert:  Stephen G. replied 7 months ago.
That's fine, but we can't complete the worksheet that is required as I've indicated above.The answer isn't as simple as it may seem, which is why I said I would complete the worksheet if I had to determine whether or not it was affected by something else in your return. These things don't work in isolation from each other.We can't come in part way through a tax return and give you an answer you can rely on without working the numbers through the process.If that's what you were expecting, that's not realistic and if you aren't satisfied then you should ask for a refund as we offer a 100% satisfaction guarantee - no questions asked.Steve G.
Customer: replied 7 months ago.
Thanks
Expert:  Stephen G. replied 7 months ago.
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