Abandoned property

[numbersone]

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.

[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).

[numbersone]

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. 

[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.

[numbersone]

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

[TaxGuyBill · Accepted solution]

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.

[numbersone]

I am using Proseries and couldn’t find a better way than override so I’m going for it.  Thanks so much for your help.  This was a new one for me this year!