Discussion Archives:Commercial Property Sold for a loss

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Discussion Forum Index --> Advanced Tax Questions --> Commercial Property Sold for a loss


Discussion Forum Index --> Tax Questions --> Commercial Property Sold for a loss

Khardge (talk|edits) said:

20 April 2012
This is somewhat of a first for me but I have a client who bought commercial property under his LLC in 2008 for $290K. Then sold it in 2011 for $200K. I believe I have to use Schedule D and Form 4797 for this transaction but will I capture the $90K loss on Schedule D?

Podolin (talk|edits) said:

20 April 2012
Sec. 1231

Spell Czech (talk|edits) said:

20 April 2012
Dontcha just hate it when someone answers this kind of question "It depends"?

"...but will I capture the $90K loss on Schedule D?"

Probably not. Start by putting your client's sale transaction on Form 4797 to see where it will lead you.

AmirK (talk|edits) said:

20 April 2012
Did the client depreciate the property? The client loss might be smaller depending on depreciation claimed or allowable. The loss is Section 1231 loss and should be reported on Form 4797.

Harry Boscoe (talk|edits) said:

20 April 2012
Have we all noticed that IRS chooses not to use the term "Section 1231" in, on, or near Form 4797 or, I think, its instructions? Seems like they prefer to just set the form up the way they want it to work, and then tell us what to put on the lines. Just noticed this. Strange. But unlike the term "trade or business," the term "Section 1231 property" is very well defined in the Code. Isn't it?

RoyDaleOne (talk|edits) said:

20 April 2012
Is this just a lot or small piece of land?

Spell Czech (talk|edits) said:

21 April 2012
Roy: Are you asking if this is "a lot or a little?"

Podolin (talk|edits) said:

21 April 2012
Spell, you are getting carried away. Roy's question is perfectly clear. But does the size of the piece of land matter if it is "just a lot"?

Harry Boscoe (talk|edits) said:

22 April 2012
Tell us what the "commercial property" is and how it was used and we'll help you pick out the forms to report it on. "...the forms on which to report it."
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