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Old 04-07-2014, 06:20 PM
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1120s K-1

employee/stock holder-Received 1120s K-1 with #9 section 1231 gain $10,000 # 16-d 13000
17-k sales of fixed assets show sales price 200, basis 502, dep allowed 92 and section 179 357.00
Basis in company 3000.
there is an additional note to the K-1portion of sect 179 recapture is 358.00 less allowable dep 208.

The section 1231 gain along with line 17-K will be shown on form 4797 part 1 line 2.

My question is how to treat section 179 recapture of 358 less allowable dep of 208 and determining the capital gain on the distribution



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Old 04-08-2014, 06:40 PM
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Quote:
Originally Posted by sdeo View Post

My question is how to treat section 179 recapture of 358 less allowable dep of 208 and determining the capital gain on the distribution
You need to treat the section 179 deduction as depreciation for purposes of the recapture rules. To figure the amount to recapture, you need to figure the depreciation that would have been allowable on the section 179 deduction you claimed,$208. Begin with the year you placed the property in service and include the year of recapture.
Subtract the depreciation figured from the section 179 deduction , $358,you claimed. The result is the amount you must recapture, $150. You must include $150 in income in the year of disposition. The section 179 deduction claimed is the part of the cost you deducted in the year you placed the property in service.So your sec 1231 gain, LTCG,’d be reduced by $150



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