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

Instructions and Help about Can Form 4797 Businesses

In this video I'm going to discuss the treatment of the sale of a rental property for tax purposes and I will also point out some IRS resources that can be referred to for additional information and general I'm talking about a rental property is one that you've owned for more than a year and you rent to tenants and when you file your tax returns into the year you file a Schedule II in which you recognize the income and expenses related to the property this is considered a trader business having a rental property it's also considered a passive investment and for the sale of rental property we'll see in this publication it is specifically defined as not a capital asset and as a result it is what's considered a section 1231 asset and you must follow section 1231 rules it may end up being treated as capital gain or a portion of the gain may end up being treated as capital gain however there are additional rules starting with section 1231 property on Form 47 ninety-seven is where the gain or loss is calculated which is step one when you're dealing with your sale of rental property the sale price is fairly explanatory there are very specific rules for what can be included in all of these however the cost basis is not simply what you paid in general it would be what you paid plus any other fees related costs also any improvements you did to the properties or remodels that were not deducted as expenses on those schedule e's increase the basis so you add them to your cost and then a critical piece in the sale of a rental property is all the depreciation expense that you took you're scheduled EES attached to your...

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