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Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3362
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I have a new section 1231 loss on my k-1 for my S Corp...

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JA: Hello. How can we help?
Customer: I have a new section 1231 loss on my k-1 for my S Corp... where do I report that loss?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: what else do you need to know?
JA: Is there anything else the Accountant should be aware of?
Customer: I sold my business last year
Customer: replied 9 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Box 9. Net Section 1231 Gain (Loss)

The amount in box 9 is generally passive if it is from a:

  • Rental activity, or

  • Trade or business activity in which you didn't materially participate.

However, an amount from a rental real estate activity isn't from a passive activity if you were a real estate professional (defined earlier) and you materially participated in the activity.

If the amount is either (a) a loss that isn't from a passive activity or (b) a gain, report it on Form 4797, line 2, column (g). Don't complete columns (b) through (f) on line 2 of Form 4797, Sales of Business Property. Instead, enter “From Schedule K-1 (Form 1120S)” across these columns.

If the amount is a loss from a passive activity, see Passive Loss Limitations in the Instructions for Form 4797. Report the loss following the Instructions for Form 8582 to figure how much of the loss is allowed on Form 4797. If the corporation had net section 1231 gain (loss) from more than one activity, it will attach a statement that will identify the section 1231 gain (loss) from each activity.

Please let me know if I can assist you further.

Thank you and best regards,


Customer: replied 9 months ago.
Barb, I had another question. On my K-1 in box 17 I have a K Statement which is an attached Section 179 Disposition Report, do I need to include income as a recapture of section 179 deduction on this?

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