Calculation of Gain or Loss, Section 1231 Gains and Losses (LO 8.7, 8.8)
Frank Willingham has the following transactions during the year:
- Sale of office equipment on March 15 that cost $82,600 when purchased on July 1, 2016. Frank has claimed $16,520 in depreciation and sells the asset for $49,560 with no selling costs.
- Sale of land on April 19 for $159,200. The land cost $175,120 when purchased on February 1, 2007. Frank's selling costs are $31,840.
Assume there were no capital improvements on either business asset sold. Frank's Social Security number is 924-56-5783.
Complete Form 4797 to report the above gains or losses.
Enter all amounts as positive numbers except for a "loss". If required, enter a "loss" as a negative number on the tax form. If an amount is zero, enter "0".
Sales of Business Property OMB No. 1545-0184 Form 4797 (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b) 2018 Department of the (2)) Treasury Internal Attach to your tax return. Attachment Revenue Service Go to www.irs.gov/ Form 4797 for instructions and the latest information. Sequence No. 27 Name(s) shown on return Identifying number Frank Willingham 924-56-5783 1 Enter the gross proceeds from sales or exchanges reported to you for 2018 on Form(s) 1099-B or 1099-5 (or substitute statement) that you are including on line 2, 10, or 20. See instructions ....... Part I Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft-Most Property Held More Than 1 Year(see instructions) Description of property (b) Date acquired (mo., day, yr.) (c) Date sold (mo. day, yr.) (d) Gross sales price (e) Depreciation allowed or allowable since acquisition (1) Cost or other basis, plus improvements and expense of sale (g) Gain or loss) Subtract (f) from the sum of (d) and (e) Office equipment Land 3 Gain, if any, from Form 4684, line 39..... 4 5 6 Section 1231 gain from installment sales from Form 6252, line 26 or 37.. Section 1231 gain or loss) from like-kind exchanges from Form 8824 ............... Gain, if any, from line 32, from other than casualty or theft ......... 7 Combine lines 2 through 6. Enter the gain or loss) here and on the appropriate line as follows: ... Partnerships and S corporations. Report the gain or loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you didn't have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long- term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below. Nonrecaptured net section 1231 losses from prior years. See instructions ...... 8 Velow. Ille 9 Is more thall 2er, enter the alloUPIL ITU ME 8 Ure 12 Veluw alu enter the yall Tolle 9 as a long-term capital gain on the Schedule D filed with your return. See instructions... Part II Ordinary Gains and Losses (see instructions) 10 Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less): 11 Loss, if any, from line 7... 12 Gain, if any, from line 7 or amount from line 8, if applicable......... 13 Gain, if any, from line 31. 14 Net gain or loss) from Form 4684, lines 31 and 38a 15 Ordinary gain from installment sales from Form 6252, line 25 or 36....... 16 Ordinary gain or loss) from like-kind exchanges from Form 8824... 17 Combine lines 10 through 16 ..... 17 18 For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below. a If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(ii), enter that part of the loss here. Enter the loss from income-producing property on Schedule A (Form 1040), line 16. (Do not include any loss on property used as an employee.) Identify as from "Form 4797, line 18a." See instructions.......... b Redetermine the gain or loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Schedule 1 (Form 1040), line 14 ....................................................... For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 130861 18a 186 Form 4797 (2018) Form 4797 (2018) Page 2 Part III Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 (see instructions) 19 (a) Description of section 1245, 1250, 1252, 1254, or 1255 property: (b) Date acquired (mo., day, yr.) (c) Date sold (mo., day, yr.) Sales of Business Property OMB No. 1545-0184 Form 4797 (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b) 2018 Department of the (2)) Treasury Internal Attach to your tax return. Attachment Revenue Service Go to www.irs.gov/ Form 4797 for instructions and the latest information. Sequence No. 27 Name(s) shown on return Identifying number Frank Willingham 924-56-5783 1 Enter the gross proceeds from sales or exchanges reported to you for 2018 on Form(s) 1099-B or 1099-5 (or substitute statement) that you are including on line 2, 10, or 20. See instructions ....... Part I Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft-Most Property Held More Than 1 Year(see instructions) Description of property (b) Date acquired (mo., day, yr.) (c) Date sold (mo. day, yr.) (d) Gross sales price (e) Depreciation allowed or allowable since acquisition (1) Cost or other basis, plus improvements and expense of sale (g) Gain or loss) Subtract (f) from the sum of (d) and (e) Office equipment Land 3 Gain, if any, from Form 4684, line 39..... 4 5 6 Section 1231 gain from installment sales from Form 6252, line 26 or 37.. Section 1231 gain or loss) from like-kind exchanges from Form 8824 ............... Gain, if any, from line 32, from other than casualty or theft ......... 7 Combine lines 2 through 6. Enter the gain or loss) here and on the appropriate line as follows: ... Partnerships and S corporations. Report the gain or loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you didn't have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long- term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below. Nonrecaptured net section 1231 losses from prior years. See instructions ...... 8 Velow. Ille 9 Is more thall 2er, enter the alloUPIL ITU ME 8 Ure 12 Veluw alu enter the yall Tolle 9 as a long-term capital gain on the Schedule D filed with your return. See instructions... Part II Ordinary Gains and Losses (see instructions) 10 Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less): 11 Loss, if any, from line 7... 12 Gain, if any, from line 7 or amount from line 8, if applicable......... 13 Gain, if any, from line 31. 14 Net gain or loss) from Form 4684, lines 31 and 38a 15 Ordinary gain from installment sales from Form 6252, line 25 or 36....... 16 Ordinary gain or loss) from like-kind exchanges from Form 8824... 17 Combine lines 10 through 16 ..... 17 18 For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below. a If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(ii), enter that part of the loss here. Enter the loss from income-producing property on Schedule A (Form 1040), line 16. (Do not include any loss on property used as an employee.) Identify as from "Form 4797, line 18a." See instructions.......... b Redetermine the gain or loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Schedule 1 (Form 1040), line 14 ....................................................... For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 130861 18a 186 Form 4797 (2018) Form 4797 (2018) Page 2 Part III Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 (see instructions) 19 (a) Description of section 1245, 1250, 1252, 1254, or 1255 property: (b) Date acquired (mo., day, yr.) (c) Date sold (mo., day, yr.)
