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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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Im selling a boat. I have owned it for 6 years in an LLC.

Resolved Question:

I'm selling a boat. I have owned it for 6 years in an LLC. For Tax Purposes is the sale of this boat on a Schedule D and treated as long term captial gain or is considered ordinary income reported on form 4797?
Submitted: 3 years ago.
Category: Tax
Expert:  Mark D replied 3 years ago.

Mark D :

Hello, was the boat used in busines?

Mark D :

*business?

Mark D :

If personal, it would be reported on Schedule D and be a long term cap gain

Mark D :

if business, depreciated would first be recaptured at a 25% rate and them the gain would still be lon-term cap gain on Form 4797.

Mark D :

Does this answer your question?

Customer:

It was used in a business. I took the purchase price, added back the depreciation taken, and then took in the sales price. Now there is a gain. So based on your answer this would be 4797 because of that correct?

Mark D :

Correct, but still considered a capital gain, not ordinary income

Customer:

So on my K1 from the LLC it should show up on line 9a not line 1 if I am using the 4797 form or is it still line 1?

Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience: MBA, EA, Specializing in Business and Individual Tax Returns and Issues
Mark D and 9 other Tax Specialists are ready to help you
Expert:  Mark D replied 3 years ago.
Is this a Single member LLC?
Customer: replied 3 years ago.
No it is a partnership LLC filing a 1065 with 4 partners
Expert:  Mark D replied 3 years ago.
Correct.
Customer: replied 3 years ago.
ok so just to confirm I fill out 4797 page 2 and this will show on the K1 line 1 as ordinary income even though it is capital gain income?
Expert:  Mark D replied 3 years ago.
It would be line 9a, not line 1.
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 989
Experience: MBA, EA, Specializing in Business and Individual Tax Returns and Issues
Mark D and 9 other Tax Specialists are ready to help you

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