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Level 2
posted Nov 28, 2021 6:13:47 PM

Question about form 4797

Let’s say I sold machinery for $4000 but I bought it for $10000 that I had for 5 years and it was fully depreciated. What would I put in lines d,e,f, and g or form 4797?

0 3 555
3 Replies
Level 15
Nov 28, 2021 7:01:52 PM

Are you actually trying to prepare a return, including Form 4797, manually? I am not sure anyone would recommend that approach.

 

Regardless, if your gross sales price is $4,000 then that would be entered in columns (d) and (g). The $10,000 purchase price and accumulated depreciation would be entered in columns (e) and (f). Note that the foregoing assumes that there was no salvage value.

Level 15
Nov 29, 2021 4:35:27 AM

If the item was fully depreciated your current cost basis is zero so it is a fully taxable sale. 

Level 15
Nov 29, 2021 8:14:15 AM

@Critter-3 is correct about this entry; you would enter this in Part III of Form 4797 as Section 1245 property that has been fully depreciated @itsweigel.