Fill Form 4797 Troubleshooting 2024-2025

Hey everyone, I wanted to walk you through problem 3-33 because I was a little confused when I tried to work through it myself. I originally assigned problem 32, so sorry for the mix-up. Whenever I assign a problem, I like to make sure I can solve it myself and understand it before giving it to you. In this case, I made a mistake and couldn't figure out why. I think the issue here is that I'm used to working with tax forms in my job as a compliance person. I'm accustomed to using forms to calculate taxable income and all its components using the rules and forms provided. It's easier for me to have the forms in front of me when answering a question like this. So, what I did was go to the IRS website and pulled up form 4797. I used this form to work through the problem, and I ended up with the same answer as the IRS. Let me walk you through the facts of the problem first, and then I'll show you the form I filled out. I hope this will help clarify things. The problem involves Gamma Corporation selling various types of property on March 3rd of the current year. Securities, equipment, building, and land were sold. First, let's talk about securities. They are considered capital assets and fall outside the definition of 1231 property. 1231 property refers to property used in a trade or business, including depreciable property and even land, even though land is not depreciable. Land is considered a 1231 asset and needs to have a holding period of more than one year to be treated as such. The reason we like 1231 assets is because when they are sold, any gain is considered 1231 gain, which is treated as capital gain. For corporations,...