How to File IRS Form 4797 - Nonrecaptured Section 1231 Losses on Sale of Real Estate
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- čas přidán 7. 09. 2024
- For other videos on IRS Form 4797:
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The sale of real estate (Section 1250 property) that is used in a trade or business and held for more than one year, can qualify for certain preferential tax treatment under Section 1231. Gains are treated as long-term capital gains, while losses are treated as ordinary losses.
However, if you sell the property at a loss and claim ordinary loss treatment in a given tax year, you must track and carryforward the amount of ordinary losses as nonrecaptured Section 1231 losses. If in subsequent tax years you generate Section 1231 gains, you must recapture as ordinary income the amount of nonrecaptured Section 1231 losses.
This loss carryforward rule in Section 1231(c)(1) prevents taxpayers from purposefully manipulating the timing of sales to benefit from ordinary loss in one year and long term capital gains in a subsequent tax year.
For more examples of Rental Real Estate sales and Section 1231 rules, see the following video: • How to Complete IRS Fo...
For a video on unrecaptured Section 1250 gains, see here: • Video
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I always like your videos! I might add that the lookback period for the 1231 losses is 5 years. Any 1231 losses older than 5 years are no longer nonrecaptured section 1231 losses. That may impact someone's tax planning.
Super! Thanks dude. If you're going to be making such excellent videos maybe think about getting a relatively good voice recorder, such as Zoom h1essential. Your sound is ok, but it it sounds a little like recorded with a cell phone - a lot of noise, noticeable when using good headphones. Looking forward to your next great video. Stay awesome!
Can you please teach how to report exchange and installment tax reporting? Thank you so much!
cool, very informative and useful. thank you so much!
Glad it was helpful!
Do all property owners need to file 4797 then flow to schedule D? Why can't we file sales on schedule D directly? Thanks!
Great video :)
Thank you! I’m glad it was helpful
GREAT VIDEO!
can you do a video that utilizes CA's AB 150 deduction? confusing for sure
Yes! We will add this to our list!
For and example, if I had a 4797 loss of $200,000 in 2022 and my taxable income was $50,000. Does this mean I can use $50,000 in 2022 and go back and use$150,000 on years 2021 and 2020? My question is what amount of the loss do I have to use in 2022, AGI or taxable income?
Hello Jason,
I’m located on CA and recently passed my EA Exam I been seeing some of your youtube video about the taxes I am wonder if I learn filing 1120s and 1065 online course with real life examples P&L and Balance Sheet. I want to be the best tax preparation with knowledge and skill
Hope to hear back from you
thanks
Why i am requesting so much, because I am studying UA CMA, if i get chance to work with US COMPANIES this will be add to my knowledge and very easily i can pass CMA, Requesting please help me
Hi Mr. Jason, this is SAKUNTHALA from INDIA, do you have any job openings, I am currently working with manufacturing company as Treasury deputy manager, and studying US CMA