The gain or loss on the sale of rental property is reported on Form 4797 (PDF), Sale of Business Property. Form 1040, Schedule D (PDF), Capital Gains and Losses, is often used in conjunction with Form 4797. For further information, refer to Publication 544, Sales on Other Disposition of Assets, Publication 550, Investment Income and Expense, the Instructions to Form 4797 (PDF), Sale of Business Property, and the Instructions to Form 1040, Schedule D, Capital Gain and Losses.

References:

• Form 4797 Instructions
• Form 1040 Schedule D (PDF), Capital Gains and Losses

The loss on the sale of rental property is reported on Form 4797 (PDF), (Sale of Business Property) as ordinary loss.

References:

• Form 4797 (PDF), Sale of Business Property
• Publication 544, Sales and Other Dispositions of Assets