(1) Amount of gain under section 1251(c)(1) (determined without regard to subparagraph (1) of this paragraph): | |
(a) Portion of gain realized ($28,000) in excess of amount recognized as ordinary income under section 1245(a)(1) ($5,000) | $23,000 |
(b) Excess deductions account balance | 15,000 |
(c) Lower of (a) or (b) | 15,000 |
(2) Limitation in subparagraph (1) of this paragraph: | |
(a) Gain recognized (determined without regard to section 1251) | 15,000 |
(b) Minus: Gain recognized as ordinary income under section 1245(a)(1) | 5,000 |
(c) Difference | 10,000 |
(3) Lower of line (1)(c) or line (2)(c) | 10,000 |
(1) Amount of gain under section 1251(c)(1) (determined without regard to subparagraph (1) of this paragraph): | |
(a) Portion of gain realized ($65,000) in excess of amount recognized as ordinary income under section 1245(a)(1) ($20,000) | $45,000 |
(b) Excess deductions account balance | 100,000 |
(c) Lower of (a) or (b) | 45,000 |
(2) Limitation in subparagraph (1) of this paragraph: | |
(a) Gain recognized (determined without regard to section 1251) | 30,000 |
(b) Minus: Gain recognized as ordinary income under section 1245(a)(1) | $20,000 |
(c) Difference | 10,000 |
(3) Lower of line (1)(c) or line (2)(c) | 10,000 |
26 C.F.R. §1.1251-4