Abandoned property

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Business property was abandoned. How do I enter that in the disposition boxes so that it does not flow to Form 4797 because this is an ordinary loss. If I enter 0 in the sales price, it triggers the 4797. If I leave the sales price blank, it does nothing.

ProConnect Tax

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TaxGuyBillAnswer

In the software program I overrode part I for 4797 and put in part II. That seemed to work. Is that how you would’ve handled it? And I really appreciate your responses

Yeah, if I couldn't find a way to 'force' it to Part 2, then I would have used overrides as you mentioned.

Be aware that using overrides MIGHT make it harder to e-file. In ProSeries, we need to uncheck the "error checking" during the e-file process to do that. I am unsure what PTO does.

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TaxGuyBill

Why do you think 4797 does not apply?

If it was held less than a year, it may be treated as an ordinary loss, but it still goes on 4797 (Part 2 of 4797).

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numbersoneAuthor

Level 2

Pub 544 states to treat it as an ordinary loss, and it was held for more than 1 year

Loss from abandonment of business or investment property is deductible as a loss. A loss from an abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. This rule also applies to leasehold improvements the lessor made for the lessee that were abandoned.

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TaxGuyBill

But that Ordinary Loss still goes on 4797 (Part 2). The Instructions for 4797 even say so.

As for how to make the software do put it in Part 2 rather than Part 1, I'm a ProSeries user so I can't help you with with how to make PTO do it. Hopefully there is a direct mechanism to do it; otherwise if you find a way to force it as short term it would go in Part 2.

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