I am need of a little guidance here. TP had residential rental property. Bought for 15k took 12k in SL dep. Sold for 90k in 2000 on installment with about 98%GP%. Been getting principle payments of about 4K per year since 2000. Would the dep have been recaptured by now and I would not have any unrecaptured 1250 amount? I did happen to see prior returns back to 05 and do not see an entry on Sch d line 19 for those years. Am I missing something?
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1250 Recapture was required to be reported in year of sale and the balance of Capital Gains to be reported over the term of the installment period. Plus the interest on the note.This post is for discussion purposes only and should be verified with other sources before actual use.
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OK Then would I be safe in saying there is none for the 14 return if it should have been done in the first year. Returns farther back than stated above just don't exist. At least that is what the TP is saying.Comment
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If there was straight line depreciation, there wouldn't have been any 1250 recapture.
What there would be is unrecaptured 1250 gain. This isn't forced to be taken in the first year (the way regular depreciation capture is done). It would have been done over the course of the installment sale, with all the income treated as capital gain being first allocated to the unrecaptured 1250 gain. With only $12K, the answer is probably the same, i.e., it's all been handled, but I don't think you can tell that without knowing how much has been received in the past, and I can't claim to have enough experience with installment sales to be sure.Comment
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