IRS Form 4797 Reporting - S Corporation Sale of Section 179 Property - Step-by-Step Instruction

IRS Form 4797 is generally included with a tax return to report the gain or loss on the sale of business assets. If a partnership or S corporation sells a business asset that previously claimed a Section 179 deduction, the asset's sale is not reported on Form 4797 with Form 1120-S. Instead, the S corporation reports the sale details of the Section 179 property as supplemental information on the Schedule K-1s. The individual shareholders must include a Form 4797 and report the sales disposition on their own Form 4797. In this example, we look at an S corporation that claimed a 100% Section 179 deduction on business equipment. The equipment was later sold in 2023, and the sale details are reported on Schedule K-1 for each shareholder. The shareholder, John Smith, must complete his own Form 4797 to report the gain. For a larger database of tutorials, please visit our website and search for your question: https://knottlearning.com/ DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials. #Form4797 #Section179 #Form1120S #ScheduleK1