How to enter the abandonment of leasehold improvements on a partnership tax return (ProConnect Tax). Have recorded the disposition (from the depreciation input area) and the numbers are correct, but they are populating Part I of Form 4797 instead of an Ordinary Loss in Part II of Form 4797. How do I get this to flow through to Part II instead of Part I of the Form 4797?
Interesting. You are right. I didn't know that.
§1.168-8 doesn't really say that, but Publication 544 does confirm that it is generally ordinary (I haven't traced where that is based on, but I'm assuming that is correct.
https://www.irs.gov/publications/p544#en_US_2021_publink100072287
As for how to enter it, I don't know if the program has an easy to to all it or not, but a work-around might be to just change the "placed in service" date and make it short-term.
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