Are the sale of tools and other items that are part of a rental property business recorded on Form 4797? If tool sales are recorded in Part I of Form 4797, does each separate tool need to be entered on a separate line, and if so, would I then need to attach a separate sheet? Also, would business property abandonments associated with the rental property be entered in Part II of 4797, and would each tool need to be listed separately, or could just the total amount for all of the tools be listed as one item on one line?
Yes - the sale of tools used in a rental property business are reported in Part I (> 1 yr) or Part II of Form 4797 (depending on how long you've owned them).
If the tools are all small tools (like hand tools) it's OK to group them together, rather than list them separately, if they were sold at the same time. Otherwise enter information for each sale.
The sale from a qualifying abandonment of business or investment property is reported in Part II of 4797. Again, if all the property was small and sold at the same time, you can group them together. Otherwise enter information for each sale.
For more information, please see: IRS Pub. 544 (2019) - Sales and Other Dispositions of Assets (HTML version) Pub is currently being revised for 2020 returns.