Chapter 44
Sales of Business Property
44.1 Depreciation Recaptured as Ordinary Income on Sale of Personal Property
44.2 Depreciation Recaptured as Ordinary Income on Sale of Real Estate
44.3 Recapture of First-Year Expensing
44.4 Gifts and Inheritances of Depreciable Property
44.5 Involuntary Conversions and Tax-Free Exchanges
44.6 Installment Sale of Depreciable Property
44.8 Property Used in a Business (Section 1231 Assets)
44.9 Sale of Property Used for Business and Personal Purposes
44.10 Should You Trade in Business Equipment?
44.12 Additional Medicare Taxes
See also:
29.7 Personal and Business Use of a Home
On the sale of business assets, the tax treatment depends on the type of asset sold.
Inventory items: Profits are taxable as ordinary income; losses are fully deductible. Sales of merchandise are reported on Schedule C if you are self-employed or Schedule F if you are a farmer.
Depreciable property, such as buildings, machinery, and equipment: If you sell at a gain, the gain is taxable as ordinary income to the extent depreciation is recaptured (44.1–44.2). Any remaining gain may be treated as capital gain or ordinary income, depending on the Section 1231 computation (44.8). Losses may be deductible as ordinary losses (44.8). Sales are reported on Form 4797. Depreciable business equipment subject to recapture is described ...
Get J.K. Lasser's Your Income Tax 2014: For Preparing Your 2013 Tax Return now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
