Hi , i used turbo tax software .Tax Year 2020 form 4797 sales and disposition of business property part 1 line 7 was a loss off $ - 42447.00. from line 7 computer automatically moved loss to part 2 line 11 and from there to line 17 and finally to line 18b. From line 18b it was moved to schedule 1 line 4 other gains and losses for all of -$42447.00?.On same schedule 1 I had a business income from schedule C $77358.00. So schedule 1 line 9 was $77358-$42447 =$34911.00 which was carried to line 8 form 1040. Property was from schedule C. QUESTION: IS THIS OK OR WRONG FOR FULL $42447 TO BE DECTED FROM BUSINESS INCOME? OR SHULD HAVE BEEN LIMITED TO SOME NUMBER?
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the loss on sale of business equipment is treated as an ordinary loss. there is a catch. if in the 5 succeeding years, you have net gains under section 1231 the first $42,000 + will be treated as ordinary income
the losses fall under iRC 1231.
So it was ok to deduct whole amount of -$42447.00 ?
yes or no answer is fine if you don't mind please.
Yes.
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