Sale of Section 197 Intangibles Business Property

[athaureaux6]

Hi online community,

the sale of intangible property used in business is reported where in the Form 4797 or in Schedule D? I have researched and the information seems to be confusing to me and as always, I trust the people on this chat better. Appreciate it. Thank you have  a great day. 

[Just-Lisa-Now-]

You should be able to sell it right from the asset entry worksheet, if you scroll down, its got a place for the disposition.

[athaureaux6]

Hi thank you for responding. Could you be more specific. Where is that asset entry worksheet you mentioned. If you do not mind. Thanks again. 

[Just-Lisa-Now-]

You entered it as an asset, right?   What type of intangible is it?  Let me run a dummy asset entry worksheet to make sure Im telling you the right info.  

[athaureaux6]

Hi Lisa, I am referring if somebody sells a copyright, or a patent, or a software, where is it reported, the disposition, the sale. Is is in 4797 or in Schedule D. I asked somebody and they told me they have the same treatment as a 1231 property but I am not sure. Thank you anyway. 

[Just-Lisa-Now-]

I just sold Goodwill for twice the purchase price and it pulled all the figures into the 4797.   Im using 2021 in this test, maybe 2022 isnt working right?  No, I did the same with 2022 and it flowed the same.

[athaureaux6]

Thank you Lisa, I think if the sell is for gain, held more than one year, it will go to Part I or Part III, if the sell is for a loss, it will go to Part I, if the sell is for a gain or a loss, held less than a year, it will go on Part II. Maybe I am wrong. God bless you. 

[Just-Lisa-Now-]

Right, at the time of purchase, youd enter that intanglible on an asset entry worksheet as Code L , then choose 197 as the IRC section.  Scroll down the asset entry worksheet to the Disposal area and enter the date and amount itr sold for, the software takes the figures and puts them on the Sch D and 4797 where they go.

[Just-Lisa-Now-]

Yes, it scatters numbers out onto Sch D and both pages of the 4797

[athaureaux6]

Thanks