K-1 from 1120S

[imjulier]

Help! I have a K-1 from an s corp (for individual tax return) that lists the following detail to line 17 with a code of K (disposition of property with section 179 deductions):

Sale of winstar

acquired 9/19/07

sold 9/19/08

year of passthrough 2007

sales price 456

cost or basis 2281

depr allowed 177

sec 179 expense 1396

Only other items passed through in 2008 are ordinary income and section 179 deduction. I have no idea what to do with this as I haven't seen it before. Any input would be greatly appreciated.

Julie

[kcjenkins]

OK, so they bought it for $2281, took $1396 of §179 plus $177 regular depreciation. So it had a basis of $708 when they sold it, and they sold it for $456, giving them a loss of $252. No recapture, since it was sold at a loss. Had it been sold at a profit, the client would have had recapture of some of the §179 depreciation.

[imjulier]

Thanks KC. I knew they had sold it at a loss according to the #s but wasn't sure what impact this would have on recapture.

Julie

[Gail in Virginia]

I have not had one of these so far, so please enlighten me. How do you show the recapture on the personal return if it turned out they sold at a profit? Say they had depreciated it out, and sold it for $1500, more than the section 179 expense they had taken.