Form 4797

Form 4797

A form one files with the IRS to report the profits (or losses) from the sale or exchange of an asset. For example, if a company sells the equipment from one of its factories, it reports the results of the sale on Form 4797.
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Others take a more aggressive approach and say that the loss can be taken on the front of the Form 1040 on the line labeled "Other gains or (losses)" with supporting reporting on Form 4797.
The election is made by claiming an ordinary loss for the sale on Form 4797, Sales of Business Property.
179 assets will not be reported on page i of Form 1120S or Form 1065, will not be reported on Schedule K, and will not be included on the Form 4797, Sales of Business Property, prepared by the passthrough entity.
Additionally, upon the sale of his home, additional forms were required including Schedule D and Form 4797 (Sale of Business Property).
If the loss occurred with respect to business or income-producing property, it should be an ordinary deduction as reported through Form 4797, Sales of Business Property.
The IRS has released the Form 4797 instructions on electing favorable capital gains treatment for certain investments.
The instructions to the 2000 IRS Form 4797 contain the following additional information.
In addition, Schedule A and Form 4797, Sales of business Property, may also be required to be filed.
Taxpayers do not need to report the sale of the business portion on form 4797.
If the property were rental investment property, $675,821 would be reported on Form 4797, Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) and Form 1040, Schedule D, with $97,347 as the unrecaptured Sec.
The gain is reported on Schedule D or Form 4797 and the new basis of the property for future transactions is the amount of the deemed sales price.
Comment: The IRS needs to carefully and quickly modify the related tax forms (in particular, Form 4797 and 6252) to reflect these changes.