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Screen K1Sale - Sales - Section 179 Pass-Through (1040)
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Overview
Use this screen to report the disposition of section 179 property that was passed through a partnership or S Corporation on Form 4797. The Schedule K-1 from partnerships and S Corporations will separately report information on the sale, exchange, or other disposition of property for which the section 179 expense deduction was claimed.
Data sharing
UltraTax CS enables sharing of K-1 financial data among all 1040, 1041, 1120, and 1065 clients automatically. (Note that financial data can transfer
into
1120C and 1065-B clients, but not out of
these clients.) For details, see Data sharing overview.You must diligently review all data that is shared among clients. See Reviewing all fields updated via data sharing for information on how to access the Imported Fields Listing.
1065/1120S Section 179 Sale - General Information
The information in this section applies to all of the forms used to report the sale of assets.
Unit / Form
These fields contain information about the business unit activity. UltraTax CS uses this information to gather and coordinate information for the business unit activity. For example, these fields enable UltraTax CS to link information (such as income, loss, sales, credits, and asset detail) for the activity. UltraTax CS will complete the data needed to link the sale to the correct Schedule K1 unit.
Description
This description is used as the unit description. This field is mandatory.
State
When processing a state return, enter the two-character postal code for the state to which this unit belongs. This code is used by the various state applications to help determine in-state and out-of-state amounts.
note
- A postal code entry is required for proper state processing.
- New Hampshire returns: UltraTax CS uses the two-digit state postal code for the location of each business activity to process apportionment Forms BET-80 and DP-80.
See State fields for more information.
Treatment
The information in this field controls where the information appears on Form 4797. Select the fieldview for a list of available codes. If this field is blank, UltraTax CS will report the sale based upon the holding period and whether the sale is a gain or loss.
Disposition due to casualty/theft
Enter
X
in this field to transfer the gain to Form 4684, Section B, line 33. Only mark this field when you enter Treatment
code 3
. For additional information, see the instructions for the Treatment
field in this screen.Property type code
Select the code that best describes the property listed in the
Description
field. If you do not enter a code, Form 6252, line 1, will default to code 4 – Other property types.Sale to related party
If this field is marked and the sale is a loss, UltraTax CS will enter an item to reverse the loss on Form 4797, line 2 or line 10 (depending on the holding period).
State use
If applicable, enter a state use code or select a code from the fieldview. The codes that are available in this field are specific to the state postal code entered in the
State
field. If state use codes are not applicable to the entered state, this field will be disabled (shaded).- For Massachusetts, New Hampshire, Pennsylvania, and Wisconsin returns, enter1for a unit that does not qualify for installment treatment.
- For New Hampshire returns, enter2if the unit Qualifies for Proprietorship Business Profits Tax.
- For Iowa returns, enter3if the unit is eligible for Qualifying current year sales for Capital Gains Deduction. This amount transfers automatically to the IASale screen.
- For California returns, code4is not applicable for this screen.
- For Idaho returns, enter code5if the unit Qualifies for capital gains deduction.
- For Vermont returns, enter6if the unit Qualifies for 40-percent exclusion.
- For Oklahoma returns, enter8if the unit Qualifies for capital gains deduction.
Delete on next year's proforma
If you are completing this screen for an installment sale, enter
X
in this field to delete this screen on next year's proforma.1065/1120S Section 179 Sale Information
Use this section enter general sales information for separately stated section 179 sales. The information will be separately stated on Schedule K-1.
Date acquired / Date sold
Enter acquired and sold dates in MM/DD/YY format as separately stated on Schedule K-1. If you want the word "Various" to print for the date on the return, enter
V
. If you want the word "Inherit" to print for the date on the return, enter I
.Commissions and other expenses of sale
Enter the amount of commissions and other expenses of sales as separately stated on Schedule K-1. UltraTax CS adds amounts entered in this field to the basis for Form 4797 dispositions. This amount is reported separately for installment sales.
Depreciation allowed or allowable excluding Section 179
Enter the depreciation amount as separately stated on Schedule K-1. This amount will not include the amount of any section 179 deduction previously passed through for the asset.
Alternative minimum tax gain/loss adjustment
Enter the difference between the gain or loss reported for the regular tax and the gain or loss calculated for the AMT as separately stated on Schedule K-1. UltraTax CS uses this amount to calculate the disposition of property reported on AMT versions of Forms 4797, 6252, Schedule D, and 6251.
Total Section 179 expense deduction passed through
Enter the total amount of section 179 expense for this asset that was previously passed through from the partnership or S Corporation. This amount will be separately stated on Schedule K-1. This amount adjusts the amount of depreciation allowed or allowable reported on Form 4797, Page 2.
Section 179 carryover
Enter the amount of section 179 expense that was not allowed to be claimed for this asset. This amount will adjust the amount of depreciation allowed or allowable reported on Form 4797, Page 2.
Form 6252 - Installment Sale Information
Use this section to enter information for current- and prior-year separately stated section 179 Form 6252 transactions for Parts I and II. The information will be separately stated on Schedule K-1.
Sale is a prior year installment sale
Mark this field if the sale is a prior-year installment sale of a separately stated section 179 sale. When this field is marked, only Part II of Form 6252 will be completed.
Prior year installment from like-kind exchange
UltraTax CS will proforma an "X" to this field when the installment sale was from a prior year like-kind exchange entered on the K1Sale screen. The K1Sale screen is used to report section 179 sales from pass-through entities. The field is not used in the calculation of the return.
Prior year gross profit percentage (Force)
If this is a prior-year installment sale, enter the amount of the prior-year gross profit percentage. The gross profit percentage was calculated on the individual's return and not passed through from the partnership or S Corporation.
Prior year gross profit percentage, AMT if different (Force)
If this is a prior-year installment sale, enter the alternative minimum tax (AMT) prior-year gross profit percentage if different from the prior-year federal gross profit percentage. The gross profit percentage was calculated on the individual's return and not passed through from the partnership or S Corporation. The percentage will be used on the AMT version of Form 6252.
Qualified Real Property Section 1245/1250 Percentage
UltraTax CS datashares the qualified real property Section 1245/1250 percentage to this field when the partnership or S corporation sold a qualified real property asset for which Section 179 expense deduction was claimed, and sold on the installment basis.
note
- In the year of sale, UltraTax CS datashares the information related to a qualified real property asset sold at a gain to two separate K1Sale screens. UltraTax CS applies the Section 1245/1250 percentage to all the amounts datashared from the Schedule K-1.
- If you enter the full amount of the payment received in theTotal current year payments receivedfield, enterXin theApply Qualified Real Property Percentage to current year payments receivedfield.
- If you enter the payment received after applying the Section 1245/1250 percentage in theTotal current year payments receivedfield, clear theXin theApply Qualified Real Property Percentage to current year payments receivedfield.
- See also Disposition of qualified real property FAQs and Notice 2013-59, 2013-40 IRB 297 -- IRC Sec(s). 179 for additional information on the disposition of qualified real property.
Apply Qualified Real Property Section Percentage to current year payments received
UltraTax CS datashares
X
to this field when a percentage is datashared to the Qualified Real Property Section 1245/1250 Percentage
field.note
- If you enter the full amount of the payment received in theTotal current year payments receivedfield, enterXin this field.
- If you enter the payment received after applying the Section 1245/1250 percentage in theTotal current year payments receivedfield, clear theXin this field.
- In the year of sale, UltraTax CS datashares the information related to a qualified real property asset sold at a gain to two separate K1Sale screens. UltraTax CS applies the Section 1245/1250 percentage to all the amounts datashared from the Schedule K-1. UltraTax CS proformas these amounts to the K1Sale screen when the asset is sold on the installment basis.
- See also Disposition of qualified real property FAQs and Notice 2013-59, 2013-40 IRB 297 -- IRC Sec(s). 179 for additional information on the disposition of qualified real property.
Prior year payments received
If this is a prior-year installment sale, enter the total amount of prior-year payments received for the separately stated section 179 sale.
Income recapture from Form 4797
If this is a prior-year installment sale, enter the amount of income recapture reported on line 12 of the Form 6252 filed in the year of sale. This was calculated on the individual's return and not passed through from the partnership or S Corporation.
Beginning of year, remaining gross profit
Enter the remaining gross profit amount at the beginning of the year if this is a prior-year installment sale. This amount was calculated on the individual's return and not passed through from the partnership or S Corporation. UltraTax CS uses the amount for passive and AMT calculations, if applicable.
Form 6252 - Related Party Installment Sale Information
Use this section to enter related-party sale information as separately stated in Schedule K-1.
Date of second sale
Enter the date of the second sale as separately stated in Schedule K-1. UltraTax CS uses the date of the second sale to complete Form 6252, Part III, Related Party Installment Income. If the second disposition occurred less than two years before the first disposition, additional income may be recognized on Form 6252.
Explanation if no tax avoidance purpose
Enter the non-tax avoidance exception as separately stated in Schedule K-1. If there is data, UltraTax CS marks the appropriate box on the form and prints a statement with the return.
Selling price of property sold by related party
Enter the selling price as separately stated in Schedule K-1. A selling price will be separately stated if the related party resells the property within two years of the original sale.