Question

form 4797 and schedule 1 line 4

Forum|Forum|2 years ago
April 11, 2024
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Hi , i used turbo tax software .Tax Year 2020 form 4797 sales and disposition of business property part 1 line 7 was a loss off $ - 42447.00. from line 7 computer automatically moved loss to part 2 line 11 and from there to line 17 and finally to line 18b. From line 18b it was moved to schedule 1 line 4 other gains and losses for all of -$42447.00?.On same schedule 1 I had a business income from schedule C $77358.00. So schedule 1 line 9 was $77358-$42447 =$34911.00 which was carried to line 8 form 1040. Property was from schedule C. QUESTION: IS THIS OK OR WRONG FOR FULL $42447 TO BE DECTED FROM BUSINESS INCOME? OR SHULD HAVE BEEN LIMITED TO SOME NUMBER?

M

Mike9241

the loss on sale of business equipment is treated as an ordinary loss. there is a catch. if in the 5 succeeding years, you have net gains under section 1231 the first $42,000 + will be treated as ordinary income

the losses fall under iRC 1231.

If—
(A)the section 1231 gains for any taxable year, do not exceed
(B)the section 1231 losses for such taxable year,
such gains and losses shall not be treated as gains and losses from sales or exchanges of capital assets

your return is reporting correctly.