Video instructions and help with filling out and completing Can Form 4797 Basics

Instructions and Help about Can Form 4797 Basics

Welcome to simple tax one two three sales of rental property form 47 97 Unruh captured 1250 gain and Schedule D tax worksheet create a basic tax return for a married couple file jointly for sales of rental property you need Schedule D and form 47 97 next click import button to enter w2 income for example enter $50,000 w2 income click Edit button to enter sales proceeds data enter property description sales proceeds the cost include original purchase price any improvements in all expenses during the sales transactions enter any depreciations deducted in the past enter sales date and purchase date rental property capital gain is 12:50 gain it will require to use form 47 97 and Schedule D for the capital gain and it also needs to use Unruh captured gain worksheet for the depreciations enter 1250 for the property type click Save when done now click View button to see the results the form 47 97 is generated since it is a capital gain enter details in part 3 the rental property is considered as 1250 gain the cost basis is adjusted by depreciation and the total capital gain is $70,000 this amount is then entered into Schedule D as long-term capital gain because of depreciation the line 19 of Schedule D must calculated using Unruh captured section 1252 the depreciation from Form 47 97 is included in the worksheet and total amount for line 19 is $20,000 now let's look at form 1040 simple income is ninety-nine thousand four hundred dollars the regular tax would be sixteen thousand four hundred thirty-seven dollars but capital gain can use Schedule D tax worksheet so look at the worksheet for taxable income of ninety nine thousand four hundred dollars the worksheet allow $25,500 zero tax allow $24,500 a tax rate of fifteen percent and forty nine thousand four hundred dollar at regular tax rate so total calculate tax of ten thousand one hundred sixty two dollars compared to regular tax it is over six thousand dollar in tax saving this is simplified example of sales of rental property if you have complicated scenario you should see professional advice thanks for watching