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Could LONG TERM CAPITAL CARRYOVER LOSS be used to reduce or eliminate DERPRECIATION RECAPTURE?

Depreciation carryover loss
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Tax Professional Answers

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NEERAJ BHATIA, CPA
Yes it could be used.
Leave a Comment 25 weeks ago

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Question Owner
Hi Neeraj thanks for your response.
However, I am getting mixed signals here.
The CPA who has prepared 1065 and 1040 is saying: partner share of $600K at 1040 level is strictly ordinary or depreciation recapture gain that
does NOT qualify to get offset from $550K long term capital carryover loss (Schedule D Part II, line 14, 15).
Total gain after sale here DOES NOT have capital gain component but ALL IS recapture gain. Long term capital carryover loss can ONLY offset
capital gain component of Total gain.
Similar opinions are held by two other CPAs.
Could you please confirm your conclusion with supporting IRS documentation and/or ruling.

Thanks
Reply 25 weeks ago
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NEERAJ BHATIA, CPA
Yes it could be used.
Leave a Comment 25 weeks ago

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Question Owner
I am still waiting to hear definite tax advise on my question: could Long Term Capital Carryover Loss reduce the Depreciation Recapture component of Total Gain realized from sale of strip mall? Thanks
Reply 25 weeks ago
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Question Owner
Hi ALL TAX EXPERTS - my question still remain un-answered for past few weeks. Could somebody respond with definite IRS ruling. Thanks
Reply 21 weeks ago

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