Sect. 1231 Gains...Can they be classified as Partnership Income?

[Adolf A.]

Below is the scenario that is unfolding for us. Looking to minimize taxes and and maximize retirement funding.

Appreciate any insights.

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I am part of a multi member LLC that has rental properties taxed as a Partnership.

We sold 2 properties (held for 20 yrs) which have accumulated a lot of depreciation.

Using Turbo Tax Business, I see a Section 1231 Gains on my K-1. ($105K)

Question: Can these Long Term Section 1231 Gains be Treated as Ordinary Income for the Partners?

I would like to salary defer (max. SOLO 401 K limit of $53K) with Income.

Our net income for the properties this year was only $20K from rents since the buildings were empty during the listing/sale period.