If you sold business-use property during the year, you had a gain or a loss on the sale. Complete and file Form 4797: Sale of Business Property.
Business-use property includes:
Reporting a Disposition of Property
You usually report a disposition of business-use property in the year you dispose of the property. A disposition occurs when you do any of these to your business property:
Classifying Business Assets
Property classifications affect how the gains or losses on the property sale are taxed. Property is classified as either of these:
If you have a loss on the sale of business-use property, it isn’t a capital loss. So, you can deduct the entire loss amount from income. You can only deduct $3,000 of net capital loss from income.
However, if you have a gain on the sale of tangible personal property, you’re taxed two ways:
To learn more, see Publication 544: Sales and Other Dispositions of Assets at www.irs.gov.