ProConnect HelpIntuit HelpIntuit

How to report sale of partnership interest as Form 4797 ordinary income and capital gain in Lacerte

by Intuit Updated 1 year ago

To enter a portion of the gain from the sale of a partnership interest, as ordinary income and capital gain, on Form 4797, Sales of Business Property, Part II, Line 10, the sale will need to be entered as two transactions in Screen 17, Dispositions.

To report the ordinary income:

  1. Go to Screen 17, Dispositions.
    • In the top section, enter a Description of Property.
    • Enter the amount of income to be reported as ordinary income in Sales Price.
    • Leave the Cost or Basis field blank.
  2. Scroll to the Dispositions (Schedule D, 4797, etc) section.
    • Enter 1 in 1 = short-term, 2 = long-term [O].
  3. Scroll down to the Form 4797 section.
    • Enter -1 in the field Depreciation allowed (-1=none, triggers 4797).

To report the capital gain:

  1. Go to Screen 17, Dispositions.
  2. In the top section, enter a Description of Property.
  3. Enter the Date Acquired.
  4. Enter the Date Sold.
  5. Enter the amount of gain to be reported as capital gain in Sales Price.

This will report the gain on Schedule D as either short-term or long-term capital gain based on the dates entered.

Lacerte Tax

Sign in now for personalized help

Ask questions, get answers, and join our large community of Intuit Accountants users.

Dynamic AdsDynamic Ads