SALES OF BUSINESS PROPERTY

[Always_Learning]

TP PURCHASED BUSINESS PROPERTY IN 2019 AND SOLD IN 2022. THERE IS A GAIN OF THE SALE OF $68967 AND IS REPORTED ON FORM 4797 WHICH CARRIES OVER TO THE SCHEDULE D. SHOULD THE GAIN BE TAXABLE? 

[sjrcpa]

Why wouldn't it be taxable?

Please don't SHOUT.

[Always_Learning]

Sorry, I didn't catch myself with the caps. The form 4797 and it shows the gain but not taxing it.

[sjrcpa]

The gain is going to Schedule D, you said.

Check the capital gains tax computation.

Depending on what else is on the return, the tax on the gain could be zero.

[Always_Learning]

Gotcha, I just thought that due to it being a gain it would be taxed regardless. This TP has a Sch C profit of $1400 and a NOL from the previous year of $7700. That's probably why it's not taxed but I was doubting myself. Thanks for the input, greatly appreciated.

[rbynaker]

How much of the gain was due to depreciation recapture?

[Always_Learning]

Per review of the history on this TP's property it was never put into depreciation, so there was none of the gain was due to depreciation recapture.

[rbynaker]

If it was an asset placed in service for business use in a prior year, the basis would be reduced by the depreciation allowed or allowable.  Sounds like you have a mess on your hands. 😞