Form 4797 – Sales of Business Property

Last reviewed: 2025‑10‑26

Use the IRS Form 4797: Sales of Business Property Tax Form Calculator IRS Form 4797: Sales of Business Property as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 4797 state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

IRS Form 4797 is required when you dispose of property used in a trade or business or income‑producing activity. This includes the sale or exchange of business assets, involuntary conversions, and noncapital asset dispositions. The form also handles depreciation recapture and Section 1231 gains or losses. 

Why You May Need to File Form 4797

You’ll complete Form 4797 if you:

Sell, exchange or convert property used in your trade or business or held for income‑production
Have a disposition of non‑capital assets that are not reported on Schedule D
Dispose of property subject to depreciation or Section 179 deduction and you must recapture deductions

Sales of Business Property
(Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2))
Part I. Net Minimum Tax on Exclusion Items
Name(s) shown on return					Identifying number
1	Enter the gross proceeds from sales or exchanges reported to you for 2016 on Form(s) 1099-B or 1099-S (or substitute statement) that you are including on line 2, 10, or 20. See instructions						1
Part I. Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theftâ€”Most Property Held More Than 1 Year (see instructions)
2	(a) Description of property	(b) Date acquired (mo., day, yr.)	(c) Date sold (mo., day, yr.)	(d) Gross sales price	(e) Depreciation allowed or allowable since acquisition	(f) Cost or other basis, plus improvements and expense of sale		(g) Gain or (loss) Subtract (f) from the sum of (d) and (e)




3	Gain, if any, from Form 4684, line 39 🖩						3
4	Section 1231 gain from installment sales from Form 6252, line 26 or 37 🖩						4
5	Section 1231 gain or (loss) from like-kind exchanges from Form 8824 🖩						5
6	Gain, if any, from line 32, from other than casualty or theft						6
7	Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows:						7
	Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you didnâ€™t have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below.
8	Nonrecaptured net section 1231 losses from prior years. See instructions						8
9	Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9 is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term capital gain on the Schedule D filed with your return. See instructions						9
Part II. Ordinary Gains and Losses (see instructions)
10	Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less):




11	Loss, if any, from line 7						11
12	Gain, if any, from line 7 or amount from line 8, if applicable						12
13	Gain, if any, from line 31						13
14	Net gain or (loss) from Form 4684, lines 31 and 38a 🖩						14
15	Ordinary gain from installment sales from Form 6252, line 25 or 36 🖩						15
16	Ordinary gain or (loss) from like-kind exchanges from Form 8824 🖩						16
17	Combine lines 10 through 16						17
18	For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below:
a	If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(ii) 🖩, enter that part of the loss here. Enter the part of the loss from income-producing property on Schedule A (Form 1040), line 28 🖩, and the part of the loss from property used as an employee on Schedule A (Form 1040), line 23 🖩. Identify as from Form 4797, line 18a 🖩 See instructions						18a
b	Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040, line 14 🖩						18b
Part III. Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 (see instructions)
19	(a) Description of section 1245, 1250, 1252, 1254, or 1255 property:						(b) Date acquired (mo., day, yr.)	(c) Date sold (mo., day, yr.)
A
B
C
D
These columns relate to the properties on lines 19A through 19D. ▸					Property A	Property B	Property C	Property D
20	Gross sales price (Note: See line 1 before completing.)			20
21	Cost or other basis plus expense of sale			21
22	Depreciation (or depletion) allowed or allowable			22
23	Adjusted basis. Subtract line 22 from line 21			23
24	Total gain. Subtract line 23 from line 20			24
25	If section 1245 property:
a	Depreciation allowed or allowable from line 22			25a
b	Enter the smaller of line 24 or 25a			25b
26	If section 1250 property: If straight line depreciation was used, enter -0- on line 26g, except for a corporation subject to section 291.
a	Additional depreciation after 1975. See instructions			26a
b	Applicable percentage multiplied by the smaller of line 24 or line 26a. See instructions			26b
c	Subtract line 26a from line 24. If residential rental property or line 24 isnâ€™t more than line 26a, skip lines 26d and 26e			26c
d	Additional depreciation after 1969 and before 1976.			26d
e	Enter the smaller of line 26c or 26d			26e
f	Section 291 amount (corporations only)			26f
g	Add lines 26b, 26e, and 26f.			26g
27	If section 1252 property: Skip this section if you didnâ€™t dispose of farmland or if this form is being completed for a partnership (other than an electing large partnership).
a	Soil, water, and land clearing expenses			27a
b	Line 27a multiplied by applicable percentage. See instructions			27b
c	Enter the smaller of line 24 or 27b			27c
28	If section 1254 property:
a	Intangible drilling and development costs, expenditures for development of mines and other natural deposits, mining exploration costs, and depletion. See instructions			20a
b	Enter the smaller of line 24 or 28a			28b
29	If section 1255 property:
a	Applicable percentage of payments excluded from income under section 126. See instructions			28a
b	Enter the smaller of line 24 or 29a. See instructions			29b
Summary of Part III Gains. Complete property columns A through D through line 29b before going to line 30.
30	Total gains for all properties. Add property columns A through D, line 24						30
31	Add property columns A through D, lines 25b, 26g, 27c, 28b, and 29b. Enter here and on line 13						31
32	Subtract line 31 from line 30. Enter the portion from casualty or theft on Form 4684, line 33 🖩. Enter the portion from other than casualty or theft on Form 4797, line 6						32
Part IV. Recapture Amounts Under Sections 179 and 280F(b)(2) When Business Use Drops to 50% or Less (see instructions)
							(a) Section 179	(b) Section 280F(b)(2)
33	Section 179 expense deduction or depreciation allowable in prior years					33
34	Recomputed depreciation. See instructions					34
35	Recapture amount. Subtract line 34 from line 33. See the instructions for where to report					35

Key Parts of Form 4797

Part I – Sales or exchanges of property used in business and held over 1 year (Section 1231).
Part II – Ordinary gains and losses (property held 1 year or less).
Part III – Recapture of depreciation, Section 1245/1250, and other special rules.

Last reviewed: 2025‑10‑26: If you believe this form requires an update, please contact us.

Tips for Accurate Completion

Before you file, ensure you have:

Documentation of date acquired, cost basis, depreciation allowed or allowable, and sale price.
Determined whether the gain qualifies as Section 1231 (taxed as capital gain) or must be recaptured as ordinary income.
Checked if you need to use additional forms such as Form 8949, Schedule D, or summarise on your return based on the type of gain.

Using Form 4797 correctly can help you avoid errors in asset disposal reporting, safeguard business loss treatment, and maintain good tax compliance. Consult a tax professional if your transaction involves mixed‑use property, complex recapture, or multiple forms.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.

Form 4797 – Sales of Business Property

Why You May Need to File Form 4797

Key Parts of Form 4797