28% Rate Gain Worksheet (Sch. D Inst)

Page 6 of 8

Instructions for Schedule D (Form 1041)

14:04 - 22-OCT-2009

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

figuring net long-term capital gain or
loss allocable to the beneficiaries.

Line 14b—Unrecaptured
Section 1250 Gain
Complete the worksheet on page 5 if
any of the following apply.
• During the tax year, the estate or
trust sold or otherwise disposed of
section 1250 property (generally, real
property that was depreciated) held
more than 1 year.
• The estate or trust received
installment payments during the tax
year for section 1250 property held
more than 1 year for which it is
reporting gain on the installment
method.
• The estate or trust received a
Schedule K-1 from an estate or trust,
partnership, or S corporation that
shows “unrecaptured section 1250
gain” reportable for the tax year.
• The estate or trust received a Form
1099-DIV or Form 2439 from a real
estate investment trust or regulated
investment company (including a
mutual fund) that reports “unrecaptured
section 1250 gain” for the tax year.
• The estate or trust reported a
long-term capital gain from the sale or
exchange of an interest in a partnership
that owned section 1250 property.

Instructions for the
Unrecaptured Section 1250
Gain Worksheet
Lines 1 through 3. If the estate or
trust had more than one property
described on line 1, complete lines 1
through 3 for each property on a
separate worksheet. Enter the total of
the line 3 amounts for all properties on
line 3 and go to line 4.
Line 4. To figure the amount to enter
on line 4, follow the steps below for
each installment sale of trade or
business property held more than 1
year.

Step 1. Figure the smaller of (a) the
depreciation allowed or allowable or (b)
the total gain for the sale. This is the
smaller of line 22 or line 24 of the 2009
Form 4797 (or the comparable lines of
Form 4797 for the year of sale) for that
property.
Step 2. Reduce the amount figured
in step 1 by any section 1250 ordinary
income recapture for the sale. This is
the amount from line 26g of the 2009
Form 4797 (or the comparable line of
Form 4797 for the year of sale) for that
property. The result is the total
unrecaptured section 1250 gain that
must be allocated to the installment
payments received from the sale.
Step 3. Generally, the amount of
section 1231 gain on each installment
payment is treated as unrecaptured
section 1250 gain until the total
unrecaptured section 1250 gain figured
in step 2 has been used in full. Figure
the amount of gain treated as
unrecaptured section 1250 gain for
installment payments received during
the tax year as the smaller of (a) the
amount from line 26 or line 37 of the
2009 Form 6252, whichever applies, or
(b) the amount of unrecaptured section
1250 gain remaining to be reported.
This amount is generally the total
unrecaptured section 1250 gain for the
sale reduced by all gain reported in
prior years (excluding section 1250
ordinary income recapture). However, if
you chose not to treat all of the gain
from payments received after May 6,
1997, and before August 24, 1999, as
unrecaptured section 1250 gain, use
only the amount you chose to treat as
unrecaptured section 1250 gain for
those payments to reduce the total
unrecaptured section 1250 gain
remaining to be reported for the sale.
Include this amount on line 4.
Line 10. Include on line 10 the
estate’s or trust’s share of the
partnership’s unrecaptured section
1250 gain that would result if the

28% Rate Gain Worksheet—Line 14c

partnership had transferred all of its
section 1250 property in a fully taxable
transaction immediately before the
estate or trust sold or exchanged its
interest in that partnership. If the estate
or trust recognized less than all of the
realized gain, the partnership will be
treated as having transferred only a
proportionate amount of each section
1250 property.
Line 12. An example of an amount to
include on line 12 is unrecaptured
section 1250 gain from the sale of a
vacation home previously used as a
rental property but converted to
personal use prior to the sale. To figure
the amount to enter on line 12, follow
the applicable instructions below.
Installment sales. To figure the
amount to include on line 12, follow the
steps below for each installment sale of
property held more than 1 year for
which you did not make an entry in Part
I of Form 4797 for the year of sale.
Step 1. Figure the smaller of (a) the
depreciation allowed or allowable or (b)
the total gain for the sale. This is the
smaller of line 22 or line 24 of the 2009
Form 4797 (or comparable lines of
Form 4797 for the year of sale) for that
property.
Step 2. Reduce the amount figured
in step 1 by any section 1250 ordinary
income recapture for the sale. This is
the amount from line 26g of the 2009
Form 4797 (or the comparable line of
Form 4797 for the year of sale) for that
property. The result is the total
unrecaptured section 1250 gain that
must be allocated to the installment
payments received from the sale.
Step 3. Generally, the amount of
capital gain on each installment
payment is treated as unrecaptured
section 1250 gain until the total
unrecaptured section 1250 gain figured
in step 2 has been used in full. Figure
the amount of gain treated as
unrecaptured section 1250 gain for

Keep for Your Records

1. Enter the total of all collectibles gain or (loss) from items reported on line 6a, column (f), of Schedules D
and D-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter as a positive number the amount of any section 1202 exclusion reported on line 6a, column (f), of
Schedules D and D-1 for which you excluded 50% of the gain, plus 2/3 of any section 1202 exclusion
reported on line 6a, column (f), of Schedules D and D-1 for which you excluded 60% of the gain. . . . . .
3. Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15 is
more than zero); Form 6252; Form 6781, Part II; and Form 8824 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Enter the total of any collectibles gain reported to the estate or trust on:
• Form 1099-DIV, box 2d;
.............
• Form 2439, box 1d; and
• Schedule K-1 from a partnership, S corporation, estate, or trust.
5. Enter the estate’s or trust’s long-term capital loss carryovers from Schedule D, line 11, and from box 11,
code C of Schedule K-1 (Form 1041) from another estate or trust . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. If Schedule D, line 5 is a (loss), enter that (loss) here. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . .
7. Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount in the
appropriate columns of Schedule D, line 14c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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