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Video instructions and help with filling out and completing Where Form 4797 Disposition

Instructions and Help about Where Form 4797 Disposition

In this video let's take a look at the federal income tax forms that have to be used to report property dispositions that we're learning about here in Chapter three we know that for 2022 there's a new format the so-called pork postcard format for the 1040 and on this first page there's no dollar amounts being reported the dollar amounts are on the back side and in lines one through five you can see the common types of income and what we're learning in Chapter three is not common so we have to first report it on our schedule number one and then write the total dollar amount here in line six and combine it with those common types of income so let's take a look at schedule number one this is a new schedule created for 2022 and we're familiar with back in Chapter 1 a Schedule C the sole proprietorship net income or net loss but now here in Chapter three we're learning about capital gains and losses that are reported on Schedule D or ordinary income business increment business losses here reported on Form forty seven ninety seven so these items are totaled subtotals and they're carried over back to that 1040 form line number six let's take a look at a Schedule D so this is page one and it's divided up into two parts the first part is short term where the acid being disposed of was held for one year or less and part two is long term where the asset was held for more than a year keep in mind if you held an acid for one year that's short-term so typically when they say more than a year they say a year plus a day so and also keep in mind in the year that you buy a asset it's really held by the seller your ownership as the buyer begins on the next day and when you sell the asset you own the asset on the date of sale and the buyer for your property will now own it in the next day so typically if you look at a calendar year here let's say as a calendar year January 1st and December 31st if you buy the asset here and you sell it here you've had not held it for a whole year so let's say you buy it here and you sell it here on January 1st of the next day you've held it only for one year that's still short-term so typically you bought it here on December 31st of the previous year remember this year doesn't count for you as the buyer you own it on the next day and you own it here for one year and when you sell it on January 1st of the falling where now it's more than a year now it's long-term notice that the short and long term you first show the detail on another form called 8949 form 8949 that is classified either as a B or C D E or F when you see a and be the first to hear of short and long term that means whoever helped process the silk it could be a broker it could be an escrow company will report to the tax payer and the IRS both the sales price and the cost amount the cost basis get both amounts are being reported to the IRS and the taxpayer when a or D applies if only the sales price the sales price is reported to the IRS then B would be used or II would be used for long term in other words the taxpayer has to keep track of their own costs that cost is not reported directly by the broker or escrow company to the IRS and if you have situation C or F then nothing was reported by the broker or the escrow company to the IRS so the sales price the sales price and the costs all is coming from the records of the taxpayer okay and nothing directly reported by anyone else to the IRS we group the gain short-term gain and losses here to get a net loss or term gain or loss group all the long-term items over here at the bottom to get a net long-term gain or loss keeping in mind that some business assets can qualify the so called net section 130 1231 gain is gonna be calculated on another form right here forty seven ninety seven and combine with the long term items on this Schedule D okay so now we gotta go to other forms of grab numbers here but let's flip this form over Schedule D and we're gonna combine this short term and this long term amount be it gain or loss and then the total is reported here in line 16 so this is the that will go back to that schedule number one okay now keep in mind that capital gains can be taxed at different rates for example we learned that the 28% rate applies to collectible games and the maximum 25 percent applies to on recaptured section for 50 games and the case of qualified dividends that you may have seen in previous a previous tax class and the capital gain that we're learning in this class either they can be taxed at very low rates like 0% or the moderate 15% or I mentioned as a caption in the previous video 20% if you're in a very high marginal tax rate and then all of these percentages multiplying by their amount of gain is showing up not here on Schedule D but on a worksheet here worksheet or this worksheet or this worksheet that are located in the instructions to Schedule D let's take a look at the form let's go back to the previous screen this form here 8949 8949 okay 8949 this first page is short term and.

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