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Discussion:Schedule D or Form 4797?

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Discussion Forum Index --> Advanced Tax Questions --> Schedule D or Form 4797?


Discussion Forum Index --> Tax Questions --> Schedule D or Form 4797?

Taxaddict1 (talk|edits) said:

5 March 2014
A C-corp engaged in real estate investment activity. They bought properties at a bargain, fixed them up and then sold them for a gain (hopefully). The properties were never used for rental so no depreciation has been claimed.

Are the transactions to be reported in the Schedule D or the Form 4797 of the Corporation tax return?

Southparkcpa (talk|edits) said:

5 March 2014
Top of my head...4797. They are not capital assets. Also, would it matter? Cap gains dates don't exist for C corps.

That's all I got at 10 pm......

Nilodop (talk|edits) said:

5 March 2014
Aren't they dealers? Why are the properties "investments"?

Ckenefick (talk|edits) said:

5 March 2014
Can a C-corp carry a loss back? If so, what we do now, in the present, might be in the past, at some point in the future, if you think about it...

Terry Oraha (talk|edits) said:

5 March 2014
A C-corp engaged in real estate investment activity.

Schedule D

Especially if all that ever happened was the C corp had land on the balance sheet. Now present something that shows the corporation intended to develop the parcel and that may change things.

Nilodop (talk|edits) said:

5 March 2014
OP seems to say the property had improvements on it, not just land, and that client "fixed them up". Ck seems to say, plan ahead!

Southparkcpa (talk|edits) said:

5 March 2014
yeah..once improvements began they become what seem to be "Inventory".

Markb29 (talk|edits) said:

6 March 2014
agree with what len is saying (implying ) - ordinary trade or business income directly on page 1 - not d, not 4797.

Nilodop (talk|edits) said:

6 March 2014
The more important "implication" is from Ck, namely, there could be losses on the same type of activity in the future, and wouldn't there be hell to pay when the client learns that capital losses do not carry back and capital gains have no favorable rate for a C corp. And, for real estate, it's usually "property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business" rather than inventory.

Terry Oraha (talk|edits) said:

6 March 2014
exactly and I don't know if taxaddict is just asking which form for the various treatments or if he's trying to get help with making a determination. If he's trying to determine "for sale to customers..." I haven't heard anything about the number of sales or the substantiality of improvements, advertising and marketing, etc.

For example this could be a bargain purchase 10 properties, moderate clean-up and paint, listed with realtor. Is that a trade or business?

Ckenefick (talk|edits) said:

6 March 2014
when the client learns that capital losses do not carry back

Well, I don't know about that, Lenny.

Markb29 (talk|edits) said:

6 March 2014
when the client learns that capital losses do not carry back


a rare foot fault by Len

Nilodop (talk|edits) said:

6 March 2014
Much worse than a foot fault, and not all that rare.

Markb29 (talk|edits) said:

6 March 2014
Much worse than a foot fault, and not all that rare.

who the heck works with c corps anymore - not many - excluding zeroed out PSC(s). We are getting rusty on the ole corps - we mostly live in a flow-through world....

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