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Q1: Publication 544 also states (see item 3 on p. 20 under Noncapital Assets) that sales of rental property (even if fully depreciated) are reported using the rules discussed in Chapter 3. The middle column of page 26 under “Section 1231 Transactions”) states “Generally, property held for the production of rents or royalties is considered to be used in a trade or business.” The sale must be reported on Form 4797, which is needed to figure the amount of unrecaptured 1250 gain (see the worksheet on page D-14 of the Schedule D instructions).
The reason the land is reported in Part I and the building is reported in Part III is to properly figure the amount of unrecaptured 1250 gain. Allocate the basis and sales price between the land and building.
Q2. Because renting real estate is considered a trade or business for many purposes (including, for example net operating losses), I don’t believe the gain from the sale of the property is treated as gain from investment property for purposes of Form 4952, but I can’t find anything that specifically addresses this issue. But if you want to take this position and properly complete Forms 4797 and 4952, no statement should be required. I don’t know whether e-filing allows the option to attach a statement of explanation.