Category: Questions about Income
I sold some assets. When would I report the sale as a "sale of business property" instead of a capital gain?
Generally, you would report the sale of any of the items below as the "sale of business property":
- Property used in your trade or business
- Depreciable and amortizable property
- Oil, gas, geothermal, or other mineral properties
- Section 126 property
- The involuntary conversion (from other than casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit.
- The disposition of capital assets not reported on Schedule D
- The gain or loss (including any related recapture) for partners and S corporation shareholders from certain section 179 property dispositions by partnerships (other than electing large partnerships) and S corporations.
- The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of section 179 or listed property decreases to 50% or less.
If you sold any of the property listed above, you would report this on Form 4797. You can find this in our program by going to Federal Section > Income > Enter Myself > Other Income > Sale of Business Property (Form 4797).
If you sold a capital asset that was not used in your business, you would report that sale on a Schedule D. You can find the Schedule D in our program by going to Federal Section > Income > Enter Myself > Capital Gain and Losses .
For more information, please reference either IRS Publication 544, Sales and Other Dispositions of Assets, or the Instructions for Form 4797.