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Author: mectecinc One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121602  
Subject: Real Estate Taxing Question Date: 3/14/2009 9:24 PM
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I am trying to understand my K-1 from a real estate partnership. We formed a partnership in 1986 to purchase a COMMERCIAL property in New Jersey for $200,000 plus land cost. We depreciated the building using a straight line (19YR) method. It was my understanding at the time if we elected to use the straight line method as opposed to a then available accelerated method we would save tax at the time of sale. So, the property was fully depreciated before we sold it in 2008. What capital gain rate should apply to the portion of the sale price which is a recapture of our $200,000 purchase price. My K-1 seems to indicate that it is an "unrecaptured section 1250 gain". That would imply that it is going to be taxed at a 25% rate as opposed to a 15% rate. Thank you in advance for your reply.
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