Installment Sale of 1984-1996 building

[NECPA in NEBRASKA]

Every time that I think that I have this sale finished, something else confuses me. I am easily confused. A building that was purchased in 1984, fully depreciated over 18 years. There are improvements from 1991 and 1996 being depreciated over 31.5 years. I thought that it would all be Section 1250, but I am getting an error message that Section 1250 may not apply to assets placed in service prior to 5/6/97. Is it 1231 property instead? All of the depreciation was straight line. I am reading pubs 544 and 537 and am still unsure. Thanks to anyone who can set me straight.

[Maribeth]

Every time that I think that I have this sale finished, something else confuses me. I am easily confused. A building that was purchased in 1984, fully depreciated over 18 years. There are improvements from 1991 and 1996 being depreciated over 31.5 years. I thought that it would all be Section 1250, but I am getting an error message that Section 1250 may not apply to assets placed in service prior to 5/6/97. Is it 1231 property instead? All of the depreciation was straight line. I am reading pubs 544 and 537 and am still unsure. Thanks to anyone who can set me straight.

You have commerical property that was purchased in 1984 and was depreciated under ACRS SL. That type of property should be §1250 property. If the property had been depreciated under ACRS accelerated (prescribed), then the property would be §1245 and all of the gain attributable to depreciation would be taxable in the year of sale.

Maribeth

[NECPA in NEBRASKA]

Thank you, Maribeth. I thought that it was 1250 until the error messages kept popping up. I'm definitely glad that it was straight-line and not ACRS.

Bonnie