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Video instructions and help with filling out and completing Which Form 4797 Losses

Instructions and Help about Which Form 4797 Losses

Here in Chapter 13 we're learning an extension of what we had really learned back in Chapter number five regarding the capital gain or loss calculation but we're not selling or disposing of capital assets here in chapter 13 what we have is section 1231 assets basically business assets that now are disposing of and we're going to have a gain or loss and maybe it will be treated as a capital gain or may be treated as an ordinary gain here under recapture rules or treat it as an ordinary loss let me kind of summarize this whole chapter in in one slide so what we're doing is selling or disposing of section 1231 assets and of course either we're gonna have a game which economically we like or there's gonna be a loss which we don't like but if there is a game the best way to treat a game is to tax it at low rates and like in Chapter five we saw long-term capital gains are taxed at lower rates like zero percent or most people would fall in the 15% bracket for long-term capital gains or if your marginal tax rate on your regular income is very high then your long-term capital gains and qualified dividends will be taxed at 20% so that's the general rule for business assets and we'll be fine 1231 assets in the next slide if you sell it at a gain long term then it's a long-term capital gain tax at lower rates but possibly we would need to maybe treat part of this game if it's recaptured by looking back we're gonna see maybe five years to see if we had deducted 1231 losses as ordinary losses and if that's the case part of this game maybe all of...