how to generate a 4797 for the purchase, remodel costs and sale of real property for my 1120s return,

[bbxrider]

how do I enter the purchase, remodel costs and sale of real property for my 1120s return? The property was held for more than 1 year. I believe this transaction gets posted in Part 1 of 4797, then to line 4 on the 1120s.

I have tried a couple scenarios in my turbo tax but I don't get a 4797 and don't see anywhere how to introduce a 4797 into the return.

this is turbotax 2021 business

[Anonymous_]

Is this rental real estate?

If so, you first need to indicate the corporation has rental real estate in the Business Info>>About Your Business section.

You also may need to enter the assets in the Rental Real Estate Assets section. Thereafter, you will enter the disposition of the assets in the section shown in the screenshot below.

[Mike9241]

real property that is not eligible for depreciation (not rental property or used in the business)  is not reported on form 4797. if it is a capital asset it goes on Schedule D.  

you have not provided enough info to determine if this is a capital asset.  where the principal business activity of the S-Corp is flipping houses it has ordinary income. 

[Anonymous_]

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@Mike9241 wrote:

...where the principal business activity of the S-Corp is flipping houses it has ordinary income. 

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That is correct and, if that is the case, it will create other issues.

[bbxrider]

thanks for the replies, the principal business is not flipping houses, this was an investment proposition, the property was held for 2 years, in this case there would not be depreciation, it was never rented

It looks like it could go on schedule d line 12, with a supporting statement? but I didn't think sch d was ever used with 1120s?

my original thinking was that it belonged on 4797 line 10 with an supporting statement.

[Anonymous_]

There is a special Schedule D for Form 1120-S. 

Enter the sale in the Investment Income section (Capital gains or losses).

[bbxrider]

thanks for the schedule D tip, and where to report in turbotax, with that, TT did generate a 1120s sch D, its not what/how I expected, the gain is being reported as 1231, long term gain on the K1 so now I wonder if I can get long term capital gains treatment on my 1040 since I'm bringing over a 1231 long term gain from the 1120s

[Anonymous_]

The figure should appear on Line 8a of your K-1.

[bbxrider]

my turbo 1120s tax return has schedule k, line 8a with a capital gain. That gain is long term and my 1040 income is less than 40k with or without the line 8a capital gain. my understanding is I don't pay taxes on the 8a gain due to the 40k capital gain exclusion.

what I don't see anywhere is some form or way to document that the line 8a gain is 100% excludable from 1040 income? do I bring it onto the 1040 and then exclude it? or just not bring it onto the 1040 and provide some statement explaining that? the instructions indicate the 8a gain is reported on sch D, but sch D has no provision for applying the long term gain exclusion or long term rate? I have been researching this quite a bit. 

[Anonymous_]

TurboTax will perform any necessary calculation. 

The only thing you have to do is enter the figures from the K-1 into the program.

[bbxrider]

ok thanks, looks like I'll find out after the personal return gets printed, frustrating that I couldn't find an answer after about an hour searching, reading instructions, etc