4797

[Unregistered]

My Scorp client sold his business.

Here are the facts:

Equipment......cost $2000 (after dep) sold for 1500.....Loss $500
Report on 4797...Part I. Is this 1245 property?

Inventory.......cost 1500.....sold for 1200 Ordinary loss
Report on 4797, Part II.

Computer (not listed).....Cost 500 (after dep)....sold for 450.. Loss $50
report on 4797, Part I Is this 1245 property?

Thanks

[Matt Sova]

Asset Sale

The Inventory sale would increase Sales by 1200 and COGS by 1500. The others would be Sec 1231 losses subject to 5 year recaptures.

[Unregistered]

The Inventory sale would increase Sales by 1200 and COGS by 1500. The others would be Sec 1231 losses subject to 5 year recaptures.

Thanks.

My tax program (ATX) asks for type of property: 1245, 1250 etc.
I think 1245 and 1250 both are 1231 property. But 1250 =real where as 1245 = Personal property such as equipments. Is this right?

Thanks

[OldJack]

Yes, 1250=business real estate 1245=business personal property such as your equipment.