How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
Type Your Tax Question Here...
Wallstreet Esq. is online now
A new question is answered every 9 seconds

I am helping a friend with k-1 from partnership that rents

Customer Question

I am helping a friend with k-1 from partnership that rents real estate and sells it as well. On this K-1, he has both 1231 gain and 1250 gain and section 754 depreciation.
The 1231 gain is pretty big ($100k). In the footnotes to the K-1, it says: "IRC section 754 basis adjustment available to offset section 1231 gain reported on your k-1. The amount to the right is $177,884. This amount doesn't appear anywhere else on the k-1.
I know that I should report 1231 gain on form 4797 and 1250 gain on line 19. My question is - can I really offset the 1231 gain (together with the 1250 gain) against this basis of $177,884? What does this basis actually represent? If so, can I just net out the entire gain (since basis is higher) so I report $0 1231 gain (and $0 1250 gain)?
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax.

I propose that you accept an offer of additional service fit a price increase. It also sets up a private link we can use to communicate. I would ask to see a copy of the k-1 to advise.

Accept, and we can work on this later this morning.