What Is Form 4797: Sales of Business Property?

Form 4797: Sales of Business Property is a tax form distributed by the Internal Revenue Service (IRS). It is used to report gains made from the sale or exchange of business property, including (but not limited to) property used to generate rental income, and property used for industrial, agricultural, or extractive resources.

Who Can File Form 4797?

Business property that is reported on Form 4797 may include property that is purchased in order to produce rental income. Taxpayers may also report a home that was used as a business on Form 4797. Gains made from the sale of oil, gas, geothermal, or mineral properties are also reported on Form 4797.

The net profit or loss from the transfer or sale of the business property is determined by subtracting the cost basis, or purchase price, from the sum of the sales price minus any 澳洲幸运5官方开奖结果体彩网:depreciation costs.

How to File Form 4797

Form 4797 has four parts. In general, most depreciable property held for more than a year is recognized under Part I: Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions from Other Than Casualty or Theft.

Property held for a year or less and sold for a loss is recorded in Part II: Ordinary Gains and Losses. Capital assets held for more than a year and sold for a profit fall in the section labeled Part III: Gain From Disposition of Property Under 澳洲幸运5官方开奖结果体彩网:Sections 1245, 1250, 1252, 1254, and 1255.

For a corporation or partnership, the total amount entered on Line 17, Part II, must be added to the gross income line on Schedule C. Part IV is labeled Recapture Amounts Under 澳洲幸运5官方开奖结果体彩网:Sections 179 and 280F(b)(2): When Business Use Drops to 50% or Less.

When a business, such as a 澳洲幸运5官方开奖结果体彩网:flow-through entity—like a partnership or an 澳洲幸运5官方开奖结果体彩网:S Corporation—sells a property, partners, and shareholders may experience a tax event (either a gain or a loss) when the property is sold and a Form 4797 is filed.

The disposition of capital assets not reported on 澳洲幸运5官方开奖结果体彩网:Schedule D must be reported on Form 4797.

All pages of Form 4797 are available on the .

The Bottom Line

Form 4797 (Sales of Business Property), issued by the IRS, is used to report financial gains made from the 🅺sale or exchange of business property. The form requires a variety of information to be provided, such as the description of the property, the purchase date, deprecia🎶tion, and the cost of the purchase.