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The sale of the second location and it's assets would be a business loss. (ordinary in character, not capital loss)
Basically it would just be like an expense to the corporation.
Resulting in a 6,000 ordinary loss.
The assets would be taken off the books and the remaining 6,000 would be recorded in an account called "loss on sale of location XX"
please let me know if something is not clear or if you have any follow up questions.
Hi so should I show the total sale price on form 1120s?
and if so would i lump up the $42000 under one category and if so what would be the category.
The total sales price would be recorded on Form 4797 Part I (assuming the property was held for more than 1 year) see Form here - www.irs.gov/pub/irs-pdf/f4797.pdf
Then the net gain loss from Form 4797 is reported on line 9 of the 1120
So the total sales price is reported on column (d) Part I of the 4797. The cost or basis (42,000) is reported in column (f) and the net loss reported in column (g).
the property was held less than a year. what form would i use it for that. thank you.
It would still be the 4797 form but Part II instead of part I