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I sold two rental properties in 1999. One was placed in service in March 1986, the other in
July 1991. Depreciation was calculated on the initial cost minus 10% for land value over their
rental histories, the 1986 one using ACRS over a 19-year term, the 1991 one using MCRS over
a 27.5-year term. How do I calculate the taxable capital gain? What are Section 1250 and
Section 1231 gains? Do they pertain to my situation?

Any help would be greatly appreciated.


Your Capital Gain is the (net) sales price less your cost basis (before taking any depreciation).

You have no Section 1231 from the facts you gave.

Section 1250 is figured on Form 4797 because you have to separate straight-line from your accelerated depreciation.


Get Form 4797 and instructions, and note the Unrecaptured Section 1250 Gain Worksheet for Line 25 of Schedule D on page D-7 of your 1040 for 1998. Ed
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