Table of Contents
Use Schedule D to report sales and exchanges of capital assets and gains on distributions to shareholders of appreciated capital assets.
Generally, report every sale or exchange of a capital asset (including like-kind exchanges) on this schedule even if there is no gain or loss.
Note.
For more information, see
Pub. 544, Sales and Other Dispositions of Assets.
Use Form 4797, Sales of Business Property, to report the following.
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The sale or exchange of:
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Property used in a trade or business;
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Depreciable and amortizable property;
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Oil, gas, geothermal, or other mineral property; and
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Section 126 property.
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The involuntary conversion (other than from casualty or theft) of property and capital assets held for business or profit.
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The disposition of noncapital assets other than inventory or property held primarily for sale to customers in the ordinary course of the corporation's trade or business.
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The section 291 adjustment to section 1250 property.
Use Form 4684, Casualties and Thefts, to report involuntary conversions of property due to casualty or theft.
Use Form 6781, Gains and Losses From Section 1256 Contracts and Straddles, to report gains and losses from section 1256 contracts and straddles.
Use Form 8824, Like-Kind Exchanges, if the corporation made one or more “like-kind” exchanges. A like-kind exchange occurs when the corporation exchanges business or investment property for property of a like kind. For exchanges of capital assets, include the gain or (loss) from Form 8824, if any, on line 3 or line 9 of Schedule D (Form 1120).
Each item of property the corporation held (whether or not connected with its trade or business) is a capital asset except the following. See section 1221(a).
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Stock in trade or other property included in inventory or held mainly for sale to customers. However, see the Note on this page.
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Accounts or notes receivable acquired in the ordinary course of the trade or business for services rendered or from the sale of stock in trade or other property included in inventory or held mainly for sale to customers.
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Depreciable or real property used in the trade or business, even if it is fully depreciated.
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Certain copyrights; literary, musical, or artistic compositions; letters or memoranda; or similar property. See section 1221(b)(3). However, see the Note on this page.
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U.S. Government publications, including the Congressional Record, that the corporation received from the Government, other than by purchase at the normal sales price, or that the corporation got from another taxpayer who had received it in a similar way, if the corporation's basis is determined by reference to the previous owner's basis.
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Certain commodities derivative financial instruments held by a dealer not in connection with its dealer activities.
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Certain identified hedging transactions entered into in the normal course of the trade or business.
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Supplies regularly used in the trade or business.
Note.
The corporation can elect to treat as capital assets certain musical compositions or copyrights it sold or exchanged. See section 1221(b)(3) and Pub. 550 for details.
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No portion of the cost of the replacement property may be taken into account to the extent the cost is taken into account to exclude gain on a different empowerment zone asset.
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The replacement property must qualify as an empowerment zone asset with respect to the same empowerment zone as the asset sold.
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The corporation must reduce the basis of the replacement property by the amount of postponed gain.
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This election does not apply to any gain (a) treated as ordinary income or (b) attributable to real property, or an intangible asset, which is not an integral part of an enterprise zone business.
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The District of Columbia enterprise zone is not treated as an empowerment zone for this purpose.
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The election is irrevocable without IRS consent.
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Tangible property, if:
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The corporation acquired the property after December 21, 2000,
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The original use of the property in the empowerment zone began with the corporation, and
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Substantially all of the use of the property, during substantially all of the time that the corporation held it, was in the corporation's enterprise zone business; and
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Stock in a domestic corporation or a capital or profits interest in a domestic partnership, if:
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The corporation acquired the stock or partnership interest after December 21, 2000, solely in exchange for cash, from the corporation at its original issue (directly or through an underwriter) or from the partnership;
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The business was an enterprise zone business (or a new business being organized as an enterprise zone business) as of the time the corporation acquired the stock or partnership interest; and
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The business qualified as an enterprise zone business during substantially all of the time during which the corporation held the stock or partnership interest.
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Report the entire gain realized from the sale as the corporation otherwise would, without regard to the election. On Schedule D, line 6, enter “Section 1397B Rollover” in column (a) and enter as a loss in column (f) the amount of gain included on Schedule D that the corporation is electing to postpone. If the corporation is reporting the sale directly on Schedule D, line 6, use the line directly below the line on which the sale is reported.
See section 1397B for more details.
A DC Zone asset is any of the following.
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DC Zone business stock.
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DC Zone partnership interest.
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DC Zone business property.
Qualified capital gain is any gain recognized on the sale or exchange of a DC Zone asset, but does not include any of the following.
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Gain treated as ordinary income under section 1245.
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Section 1250 gain figured as if section 1250 applied to all depreciation rather than the additional depreciation.
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Gain attributable to real property, or an intangible asset, that is not an integral part of a DC Zone business.
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Gain from a related-party transaction. See Sales and Exchanges Between Related Persons in chapter 2 of Pub. 544.
See Pub. 954 and section 1400B for more details on DC Zone assets and special rules.
Report the entire gain realized from the sale or exchange as the corporation otherwise would without regard to the exclusion. On Schedule D, line 6, enter “DC Zone Asset” in column (a) and enter as a loss in column (f) the amount of the allowable exclusion. If reporting the sale directly on Schedule D, line 6, use the line directly below the line on which the corporation is reporting the sale.
A qualified community asset is any of the following.
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Qualified community stock.
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Qualified community partnership interest.
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Qualified community business property.
Qualified capital gain is any gain recognized on the sale or exchange of a qualified community asset, but does not include any of the following.
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Gain treated as ordinary income under section 1245.
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Section 1250 gain figured as if section 1250 applied to all depreciation rather than the additional depreciation.
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Gain attributable to real property, or an intangible asset, that is not an integral part of a qualified community business.
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Gain from a related-party transaction. See Sales and Exchanges Between Related Persons in chapter 2 of Pub. 544.
See Pub. 954 and section 1400F for more details on qualified community assets and special rules.
Report the entire gain realized from the sale or exchange as the corporation otherwise would without regard to the exclusion. On Schedule D, line 6, enter “Qualified Community Asset” in column (a) and enter as a loss in column (f) the amount of the allowable exclusion. If reporting the sale directly on Schedule D, line 6, use the line directly below the line on which the corporation is reporting the sale.
section 384 may limit the amount of recognized built-in capital gains that may be offset by preaquisition capital losses.
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