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

Instructions and Help about Can Form 4797 Edition

In this talk I'll go through the general calculation of a gain or loss for when you sell something so an asset is something of value that you own and there are different categories for tax purposes because that's how the rules are defined based on the different categories so when you sell a property the amount you receive as payment is called the sale price or also in taxes the proceeds from the sale now while this is usually the cash you'd receive for selling the item this amount also includes everything of benefit that you receive for the property so if the buyer assumes a loan that you had on the property this amount is included in the sales price and if the buyer trades you items or services for the property then the fair market value should be included as the proceeds as well if you'll receive payments over multiple tax years then still include the total amount as the sales price but keep in mind that interest income must be accounted for as well and you can refer to my video on installment sales for more information now if you dispose of an asset without selling it you may have zero proceeds or if you receive any amount for disposing of the property for example say you scrap metal then include that amount as the proceeds so to calculate the gain or loss on the sale of property you subtract your adjusted basis in the property from the total sales price now in general the adjusted basis is the cost basis which as it sounds is what you paid to buy the item cost basis can be increased by expenses you paid to get the asset ready for its intended use such as shipping costs and installation costs additionally there are detailed rules for cost that can be added to or subtracted from the cost basis for calculating the adjusted basis for different types of property and situations so if your adjusted basis is less than the selling price you have a game but if the adjusted basis is more than the selling price you have a loss so how does this gain or loss affect your taxes well you can't really say on an individual basis meaning if you're looking at one property you sold unless that's the only property or item you sold for the year and that's because of the netting rules for all gains and losses thanks for watching and let me know if you have any questions in the comments below