Generally, Form 4797 is used to report the sale of a business. This may include your home that was converted into a rental property or any real property used for trade or business.
Who Can File Form 4797: Sales of Business Property?
According to the IRS Instructions for Form 4797, you should file this Form with your return if you sold or exchanged any:
- Real property used in your trade or business
- Depreciable and amortizable tangible property used in your trade or business
- Oil, gas, geothermal, or other mineral properties
- Section 126 property
What if I used my main home for business?
If you used your main home for business and as your principal residence, during the 5-year period up to the date of sale, you may qualify to exclude all or part of the gain figured on Form 4797. This situation is typical for self-employed persons and independent contractors, who generate their income from home.
IRS Publication 523, provides additional information on the partial or whole gain exclusion.
How do I enter form 4797?
- Federal
- Income (select my forms)
- Less Common Income
- Sale of Business Property - Form 4797