Ordinary Gain or Depreciation Short Description 1231 income or (Loss) Recapture Term Long Term Total Long Long Long term term term 28% (Loss) 25% 0/15/20% a. Land (63,300) 0 0 (63,300) $ 0 $ 0 0 0 b. Iron Byron 24,300 18,000 6,300 0 0 0 0 0 c1. Sofa 440 440 0 0 0 0 0 0 0 c2. Chair (1,110) 0 (1,110) 0 0 0 0 0 0 c3. Marketable securities 7,780 0 0 0 0 7,780 0 0 7,780 c4. Land - for investment 2,450 0 0 0 0 2,450 0 0 2,450 c5. Investment property (3,100) 0 0 0 0 (3,100) 0 0 (3,100) d1. Building 146,000 0 146,000 0 0 0 0 0 0 d2. Land 25,000 0 25,000 0 0 0 0 0 0 138,460 18,440 176,190 (63,300) 0 7,130 0 0 7,130 1231 netting Step1 - depreciation recapture - ordinary income Step 2 - 1231 Gain or Loss netting - gains or losses exclusive of 120,690 $1250 - Unrecapture $1250 55,500 Step 3 - lookback rule - apply to unrecapture $1250 first Ordinary income Remaining unrecapture $1250 Remaining gain - 0/15/20 Capital gain netting: Long term capital loss carryover Reclassified (18,440) 18,440 (6,660) 6,660 (48,840) 48,840 48,840 (120,690) 120,690 120,690 0 0 (38,200) 0 176,660 0 48,840 127,820 0 0 0 0 176,660 0 48,840 127,820