Self-Study Problem 8.6

Gary Farmer had the following Section 1231 gains and losses during the 2017 tax year:

Sold land acquired on December 3, 2006, at a cost of $24,000, for $37,000 on January 5, 2017. The cost of selling the land was $500, and there was no depreciation allowable or capital improvements made to the asset over the life of the asset.

Sold a business computer with an adjusted basis of $20,700 that was acquired on April 5, 2014. The original cost was $25,875, and accumulated depreciation was $5,175. The computer was sold on May 2, 2017, for $14,000, resulting in a $6,700 loss.

Gary's employer identification number is 74-8976432. Use page 1 of Form 4797 to report the above gains and losses.

Enter all amounts as positive numbers except for "loss". Enter any loss as a negative number on the tax form. If an amount is zero, enter "0".

Form 4797 Department of the Treasury Internal Revenue Service	Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) Attach to your tax return. Go to www.irs.gov/Form4797 for instructions and the latest information.	OMB No. 1545-0184
		2017 Attachment Sequence No. 27

Name(s) shown on return Gary Farmer

Identifying number 74-8976432

1

Enter the gross proceeds from sales or exchanges reported to you for 2017 on Form(s) 1099-B or 1099-S (or substitute statement) that you are including on line 2, 10, or 20 (see instructions) . . . . . . .

1

Part I	Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or TheftMost Property Held More Than 1 Year (see instructions)

2	(a) Description of property	(b) Date acquired (mo., day, yr.)	(c) Date sold (mo., day, yr.)	(d) Gross sales price	(e) Depreciation allowed or allowable since acquisition	(f) Cost or other basis, plus improvements and expense of sale	(g) Gain or (loss) Subtract (f) from the sum of (d) and (e)
Land		< role="button" >04/05/201412/03/2006	< role="button" >01/05/201705/02/2017
Computer		< role="button" >04/05/201412/03/2006	< role="button" >01/05/201705/02/2017

3	Gain, if any, from Form 4684, line 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
4	Section 1231 gain from installment sales from Form 6252, line 26 or 37 . . . . . . . . . . . . . . . . . . . .	4
5	Section 1231 gain or (loss) from like-kind exchanges from Form 8824 . . . . . . . . . . . . . . . . . . . . .	5
6	Gain, if any, from line 32, from other than casualty or theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7	Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows: . . .	7
	Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below.
	Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you didn't have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below.
8	Nonrecaptured net section 1231 losses from prior years. See instructions . . . . . . . . . . . . . . . . . . . . .	8
9	Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9 is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term capital gain on the Schedule D filed with your return. See instructions . . . . . . .	9

Part II

Ordinary Gains and Losses (see instructions)

10	Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less):

11	Loss, if any, from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11	()
12	Gain, if any, from line 7 or amount from line 8, if applicable. . . . . . . . . . . . . . . . . . . . . . . .	12
13	Gain, if any, from line 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
14	Net gain or (loss) from Form 4684, lines 31 and 38a . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
15	Ordinary gain from installment sales from Form 6252, line 25 or 36 . . . . . . . . . . . . . . . . .	15
16	Ordinary gain or (loss) from like-kind exchanges from Form 8824. . . . . . . . . . . . . . . . .	16
17	Combine lines 10 through 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17

18	For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a and b below. For individual returns, complete lines a and b below:
a	If the loss on line 11 includes a loss from Form 4684, line 35, column (b)(ii), enter that part of the loss here. Enter the part of the loss from income-producing property on Schedule A (Form 1040), line 28, and the part of the loss from property used as an employee on Schedule A (Form 1040), line 23. Identify as from "Form 4797, line 18a." See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
		18a

b

Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18b

For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 13086I

Form 4797 (2017)