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Form 4797: Sales of Business Property (Everything to Know)

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Dan Buckley
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Written By
Dan Buckley
Dan Buckley is an US-based trader, consultant, and part-time writer with a background in macroeconomics and mathematical finance. He trades and writes about a variety of asset classes, including equities, fixed income, commodities, currencies, and interest rates. As a writer, his goal is to explain trading and finance concepts in levels of detail that could appeal to a range of audiences, from novice traders to those with more experienced backgrounds.
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Updated
Jul 4, 2022

Form 4797 is used to report the sale of business property. This includes buildings, machinery, equipment, cars, and trucks.

The form is also used to report the sale of intangible assets, such as patents and copyrights.

If you sell business property, you may need to file Form 4797. This form is used to report the sale of business property, including:

  • Buildings
  • Machinery
  • Equipment
  • Cars
  • Trucks
  • Intangible assets (such as patents and copyrights)

How to fill out Form 4797

When filling out Form 4797, entities must provide the following information:

  • Description of the property
  • Purchase date
  • Cost of purchase
  • Sale or transfer date
  • Gross sales price
  • Depreciation amount (which is added to the sales price)

You will need to file Form 4797 if you sell business property for more than your basis in the property.

Your basis is usually what you paid for the property, plus any improvements you made.

If you have a loss on the sale of business property, you may be able to deduct it on your tax return.

Who Can File Form 4797: Sales of Business Property?

Form 4797 is filed by:

  • Partnerships
  • S corporations
  • Sole proprietors
  • Other entities, such as trusts and estates

If you are an individual who sold business property, you will not file Form 4797. Instead, you will report the sale on Schedule D (Form 1040).

When to File Form 4797: Sales of Business Property?

Form 4797 is filed for the tax year in which the sale or transfer of business property occurred.

For example, if you sold business property on December 31, 2022, you would file Form 4797 for the 2022 tax year.

The due date for Form 4797 is the same as the due date for your tax return.

If you file Form 4797 separately from your tax return, you will need to attach it to Form 1040, Form 1065, or Form 1120.

How to File Form 4797: Sales of Business Property?

You can file Form 4797 electronically or by paper.

To file electronically, you must have software that is compatible with the IRS e-file system.

You can get this software from a tax preparer, an online tax service, or a company that sells tax preparation software.

If you file Form 4797 by paper, you will need to mail it to the address listed on the form.

Instructions for Filing Form 4797: Sales of Business Property

For more information on these penalties, see Form 4797 Instructions on the IRS.gov website.

If You Need Help with Form 4797

If you have any questions about Form 4797, you can contact the IRS.

You can also get help from a tax professional or an accountant.

Form 4797: Sales of Business Property – FAQs

What is Form 4797 used for?

Form 4797 is used to report the sale of business property.

This includes buildings, machinery, equipment, cars, and trucks.

The form is also used to report the sale of intangible assets, such as copyrights and patents.

Do I need to file Form 4797?

You will need to file Form 4797 if you sell business property for more than your basis in the property.

Your basis is usually what you paid for the property, plus any improvements you made.

If you have a loss on the sale of business property, you may be able to deduct it on your tax return.

Who can file Form 4797?

Form 4797 can be filed by business entities – partnerships, S corporations, sole proprietors, and other entities, such as trusts and estates.

If you are an individual who sold business property, you will not file Form 4797. In that case, you will report the sale on Schedule D (Form 1040).

When is Form 4797 due?

Form 4797 is due for the tax year in which the sale or transfer of business property occurred. For example, if you sold business property on December 31, 2022, you would file Form 4797 for the 2022 tax year.

The due date for Form 4797 is the same as the due date for your tax return. If you file Form 4797 separately from your tax return, you will need to attach it to Form 1040, Form 1065, or Form 1120.

How do I file Form 4797?

You can file Form 4797 electronically or by paper. To file electronically, you must have software that works with the IRS electronic filing system. You can get this via a tax preparer, online tax service, or a company that sells tax preparation software.

If you file Form 4797 by paper, you will need to mail it to the address listed on the form.

Summary – Form 4797

Form 4797 is used to report the sale of business property.

The form is also used to report the sale of intangible assets, such as patents and copyrights.

Form 4797 can be filed by partnerships, S corporations, sole proprietors, and other entities.

Individuals who sell business property do not file Form 4797. Instead, they report the sale on Schedule D of a Form 1040.

Form 4797 is due for the tax year in which the sale or transfer of business property occurred.

The due date for Form 4797 is the same as the regular due date for your tax return. Form 4797 can be filed electronically or by paper (if by paper, to the address listed on the form).

If you have any questions about Form 4797, you can contact the IRS or get help from an accountant or tax professional.