Music, almost everything you own and use for personal or investment purposes, is a capital asset. Examples include a home, personal use items like household furnishings, and stocks or bonds held as investments. When you sell a capital asset, the difference between the adjusted basis in the asset and the amount you realized from the sale is a capital gain or a capital loss. Generally, an asset's basis is its cost to the owner. However, if you receive the asset as a gift or inheritance, refer to topic 703 for information about your basis. For information on calculating adjusted basis, refer to publication 551 "Basis of Assets" on the IRS website. You have a capital gain if you sell the asset for more than your adjusted basis, and you have a capital loss if you sell the asset for less than your adjusted basis. Losses from the sale of personal use property, such as your home or car, aren't tax deductible. Capital gains and losses are classified as long-term or short-term. If you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. For additional information, refer to publication 544 "Sales and Other Dispositions of Assets." If you sell your main home, refer to topics 701 and 703 and publication 523 "Selling Your Home".
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Video instructions and help with filling out and completing When Form 4797 Separately
