! qualified capital gain. Identify the amount of gain

CAUTION that is unrecaptured section 1250 gain and report

it on the Schedule D for the return you are filing.

Exclusion of Gain From Qualified Community Assets If you sold or exchanged a qualified community asset acquired after 2001 and before 2010, you may be able to exclude the “qualified capital gain.” The qualified gain is, generally, any gain recognized in a trade or business that you would otherwise include on Form 4797, Part I. This exclusion also applies to an interest in, or property of, certain renewal community businesses. See sections 1400F(c) and (d) (as in effect before their repeal) for special rules and limitations.

How to report. If applicable, report the entire gain realized from the sale or exchange as you otherwise would without regard to the exclusion. To report the exclusion, enter “Qualified Community Asset Exclusion” on Form 4797, line 2, column (a), and enter as a (loss) in column (g) the amount of the exclusion that offsets the gain reported on Part I, line 6.