Sales of Business Property

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Instructions for Form 4797

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14:57 - 24-OCT-2007

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2007

Department of the Treasury
Internal Revenue Service

Instructions for Form 4797
Sales of Business Property
(Also Involuntary Conversions and Recapture Amounts
Under Sections 179 and 280F(b)(2))
Section references are to the Internal
Revenue Code unless otherwise noted.

What’s New

• If you sold or exchanged a qualified

community asset acquired after
December 31, 2001, and held more
than 5 years, you may be able to
exclude any “qualified capital gain.” See
Exclusion of Gain From Qualified
Community Assets on page 3.
• The election to defer gain from
qualifying electric transmission
transactions will not apply to sales or
dispositions after December 31, 2007.
See page 3 of the instructions.

General Instructions
Purpose of Form
Use Form 4797 to report:
• The sale or exchange of:
1. Property used in your trade or
business;
2. Depreciable and amortizable
property;
3. Oil, gas, geothermal, or other
mineral properties; and
4. Section 126 property.
• The involuntary conversion (from
other than casualty or theft) of property
used in your trade or business and
capital assets held in connection with a
trade or business or a transaction
entered into for profit.
• The disposition of noncapital assets
(other than inventory or property held
primarily for sale to customers in the
ordinary course of your trade or
business).
• The disposition of capital assets not
reported on Schedule D.
• The gain or loss (including any
related recapture) for partners and S
corporation shareholders from certain
section 179 property dispositions by
partnerships (other than electing large
partnerships) and S corporations.
• The computation of recapture
amounts under sections 179 and
280F(b)(2) when the business use of
section 179 or listed property
decreases to 50% or less.

Other Forms To Use

Special Rules

Thefts, to report involuntary
conversions from casualties and thefts.
• Use Form 6252, Installment Sale
Income, to report the sale of property
under the installment method.
• Use Form 8824, Like-Kind
Exchanges, to report exchanges of
qualifying business or investment
property for property of a like kind. For
exchanges of property used in a trade
or business (and other noncapital
assets), enter the gain or (loss) from
Form 8824, if any, on
line 5 or line 16.
• If you sold property on which you
claimed investment credit, see Form
4255, Recapture of Investment Credit,
to find out if you must recapture some
or all of the credit.

At-Risk Rules

• Use Form 4684, Casualties and

If you report a loss on an asset used in
an activity for which you are not at risk,
in whole or in part, see the instructions
for Form 6198, At-Risk Limitations.
Also, see Pub. 925, Passive Activity
and At-Risk Rules. Losses from passive
activities are subject first to the at-risk
rules and then to the passive activity
rules.

Depreciable Property and
Other Property Disposed of
in the Same Transaction
If you disposed of both depreciable
property and other property (for
example, a building and land) in the
same transaction and realized a gain,

Where To Make First Entry for Certain Items Reported on This Form
(b)
Held 1 year
or less

(a)
Type of property
1 Depreciable trade or business property:
a Sold or exchanged at a gain . . . . . . . . . . . . . . . . .
b
2
a
b
3

Sold or exchanged at a loss . . . . . . . . . . . . . . . .
Depreciable residential rental property:
Sold or exchanged at a gain . . . . . . . . . . . . . . . .
Sold or exchanged at a loss . . . . . . . . . . . . . . . .
Farmland held less than 10 years upon which soil,
water, or land clearing expenses were deducted:
a Sold at a gain . . . . . . . . . . . . . . . . . . . . . . . . . .
b Sold at a loss . . . . . . . . . . . . . . . . . . . . . . . . . .
4 All other farmland . . . . . . . . . . . . . . . . . . . . . . .
5 Disposition of cost-sharing payment property
described in section 126 . . . . . . . . . . . . . . . . . .
6

.

Part II

Part III (1245,
1250)
Part I

.
.

Part II
Part II

Part III (1250)
Part I

.
.
.

Part II
Part II
Part II

Part III (1252)
Part I
Part I

.

Part II

Part III (1255)

Held less
than 24
months

Held 24
months
or more

Part II
Part II
Part II

Part III (1245)
Part I
Part I

Held less
than 12
months

Held 12
months
or more

Part II
Part II
Part II

Part III (1245)
Part I
Part I

Cattle and horses used in a trade or business for
draft, breeding, dairy, or sporting purposes:

a Sold at a gain . . . . . . . . . . . . . . . . . . . . . . . . . . .
b Sold at a loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
c Raised cattle and horses sold at a gain . . . . . . . . .
7

Livestock other than cattle and horses used in a
trade or business for draft, breeding, dairy, or
sporting purposes:

a Sold at a gain . . . . . . . . . . . . . . . . . . . . . . . . . . .
b Sold at a loss . . . . . . . . . . . . . . . . . . . . . . . . . . .
c Raised livestock sold at a gain . . . . . . . . . . . . . . .

Cat. No. 13087T

Part II

(c)
Held more
than 1 year

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Instructions for Form 4797

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you must allocate the amount realized
between the two types of property
based on their respective fair market
values (FMVs) to figure the part of the
gain to be recaptured as ordinary
income because of depreciation. The
disposition of each type of property is
reported separately in the appropriate
part of Form 4797 (for example, for
property held more than 1 year, report
the sale of a building in Part III and land
in Part I).

Disposition of Assets That
Constitute a Trade or
Business
If you sell a group of assets that make
up a trade or business and the buyer’s
basis in the assets are determined
wholly by the amount paid for the
assets, both you and the buyer
generally must allocate the total sales
price to the assets transferred. File
Form 8594, Asset Acquisition
Statement, to report the sale. Pub. 544,
Sales and Other Dispositions of Assets,
discusses the sale of business assets
in chapter 2 under Other Dispositions.

Installment Sales
If you sold property at a gain and you
will receive a payment in a tax year
after the year of sale, you generally
must report the sale on the installment
method unless you elect not to do so.
Use Form 6252 to report the sale on
the installment method. Also use Form
6252 to report any payment received
during your 2007 tax year from a sale
made in an earlier year that you
reported on the installment method.
To elect out of the installment
method, report the full amount of the
gain on a timely filed return (including
extensions). If you timely filed your tax
return without making the election, you
can still make the election by filing an
amended return within 6 months of the
due date of your return (excluding
extensions). Write “Filed pursuant to
section 301.9100-2” at the top of the
amended return.
See Pub. 537, Installment Sales, for
more details.

Traders Who Made a
Mark-To-Market Election
A trader in securities or commodities
may elect under section 475(f) to use
the mark-to-market method to account
for securities or commodities held in
connection with a trading business.
Under this method of accounting, any
security or commodity held at the end
of the tax year is treated as sold (and
reacquired) at its FMV on the last
business day of that year.
Unless you are a new taxpayer, the
election must be made by the due date

(not including extensions) of the tax
return for the year prior to the year for
which the election becomes effective.
If you are a trader in securities or
commodities with a mark-to-market
election under section 475(f) in effect
for the tax year, the following special
rules apply.
• Gains and losses from all securities
or commodities held in connection with
your trading business (including those
marked to market) are treated as
ordinary income and losses, instead of
capital gains and losses. As a result,
the lower capital gain tax rates and the
limitation on capital losses do not apply.
• The gain or loss from each security
or commodity held in connection with
your trading business (including those
marked to market) is reported on Form
4797, line 10 (see the instructions for
line 10 on page 6).
• The wash sale rule does not apply to
securities or commodities held in
connection with your trading business.
For details on the mark-to-market
election and how to make it, see Pub.
550, Investment Income and Expenses;
sections 475(e) and 475(f); and Rev.
Proc. 99-17, 1999-1 C.B. 503. You can
find Rev. Proc. 99-17 on page 52 of
Internal Revenue Bulletin 1999-7 at
www.irs.gov/pub/irs-irbs/irb99-07.pdf.

Involuntary Conversion of
Property
You may not have to pay tax on a gain
from an involuntary or compulsory
conversion of property. See Pub. 544
for details.

Exclusion of Gain on Sale of
a Home Used for Business
If the property sold was used for
business or to produce rental income
and was also owned and used as your
home during the 5-year period ending
on the date of the sale, you may be
able to exclude part or all of the gain
figured on Form 4797. For details on
the exclusion (including how to figure
the amount of the exclusion), see Pub.
523, Selling Your Home.
If the property was held more than 1
year, complete Part III to figure the
amount of the gain. Do not take the
exclusion into account when figuring
the gain on line 24. If line 22 includes
depreciation for periods after May 6,
1997, you cannot exclude gain to the
extent of that depreciation. On line 2 of
Form 4797, write “Section 121
exclusion,” and enter the amount of the
exclusion as a (loss) in column (g).
If the property was held for 1 year or
less, report the sale and the amount of
the exclusion, if any, in a similar
manner on line 10 of Form 4797.

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Passive Loss Limitations
If you have an overall loss from passive
activities and you report a loss on an
asset used in a passive activity, use
Form 8582, Passive Activity Loss
Limitations, or Form 8810, Corporate
Passive Activity Loss and Credit
Limitations, to see how much loss is
allowed before entering it on Form
4797.
You cannot claim unused passive
activity credits when you dispose of
your interest in an activity. However, if
you dispose of your entire interest in an
activity, you may elect to increase the
basis of the credit property by the
original basis reduction of the property
to the extent that the credit has not
been allowed because of the passive
activity rules. Make the election on
Form 8582-CR, Passive Activity Credit
Limitations, or Form 8810. No basis
adjustment may be elected on a partial
disposition of your interest in an activity.

Recapture of Preproductive
Expenses
If you elected out of the uniform
capitalization rules of section 263A, any
plant that you produce is treated as
section 1245 property. For dispositions
of plants reportable on Form 4797,
enter the recapture amount taxed as
ordinary income on line 22 of Form
4797. See Disposition of plants and
animals in chapter 9 of Pub. 225,
Farmer’s Tax Guide, for details.

Section 197(f)(9)(B)(ii)
Election
If you made the election under section
197(f)(9)(B)(ii) to recognize gain on the
disposition of a section 197 intangible
and to pay a tax on that gain at the
highest tax rate, include the additional
tax on Form 1040, line 44 (or the
appropriate line of other income tax
returns). Enter “197” and the amount in
the space next to line 44. The
additional tax is the amount that, when
added to any other income tax on the
gain, equals the gain multiplied by the
highest tax rate.

Rollover of Gain From Sale
of Empowerment Zone
Assets
If you sold a qualified empowerment
zone asset that you held for more than
1 year, you may be able to elect to
postpone part or all of the gain that you
would otherwise include on Form 4797,
Part I. If you make the election, the gain
on the sale generally is recognized only
to the extent, if any, that the amount
realized on the sale exceeds the cost of
qualified empowerment zone assets
(replacement property) you purchased
during the 60-day period beginning on

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Instructions for Form 4797

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the date of the sale. The following rules
apply.
• No portion of the cost of the
replacement property may be taken into
account to the extent the cost is taken
into account to exclude gain on a
different empowerment zone asset.
• The replacement property must
qualify as an empowerment zone asset
with respect to the same empowerment
zone as the asset sold.
• You must reduce the basis of the
replacement property by the amount of
postponed gain.
• This election does not apply to any
gain (a) treated as ordinary income or
(b) attributable to real property, or an
intangible asset, which is not an
integral part of an enterprise zone
business.
• The District of Columbia enterprise
zone is not treated as an empowerment
zone for this purpose.
• The election is irrevocable without
IRS consent.
See Pub. 954, Tax Incentives for
Distressed Communities, for the
definition of empowerment zone and
enterprise zone business. You can find
out if your business is located within an
empowerment zone by using the RC/
EZ/EC Address Locator at www.hud.
gov/crlocator.
Qualified empowerment zone assets
are:
• Tangible property, if:
1. You acquired the property after
December 21, 2000,
2. The original use of the property in
the empowerment zone began with
you, and
3. Substantially all of the use of the
property, during substantially all of the
time that you held it, was in your
enterprise zone business; and
• Stock in a domestic corporation or a
capital or profits interest in a domestic
partnership, if:
1. You acquired the stock or
partnership interest after December 21,
2000, solely in exchange for cash, from
the corporation at its original issue
(directly or through an underwriter) or
from the partnership;
2. The business was an enterprise
zone business (or a new business
being organized as an enterprise zone
business) as of the time you acquired
the stock or partnership interest; and
3. The business qualified as an
enterprise zone business during
substantially all of the time during which
you held the stock or partnership
interest.
How to report. Report the entire gain
realized from the sale as you otherwise
would without regard to the election. On
Form 4797, line 2, enter “Section
1397B Rollover” in column (a) and
enter as a (loss) in column (g) the

amount of gain included on Form 4797
that you are electing to postpone. If you
are reporting the sale directly on Form
4797, line 2, use the line directly below
the line on which you reported the sale.
See section 1397B for more details.

Exclusion of Gain From Sale
of DC Zone Assets
If you sold or exchanged a District of
Columbia Enterprise Zone (DC Zone)
asset that you held for more than 5
years, you may be able to exclude the
“qualified capital gain.” The qualified
gain is, generally, any gain recognized
in a trade or business that you would
otherwise include on Form 4797, Part I.
This exclusion also applies to an
interest in, or property of, certain
businesses operating in the District of
Columbia.
DC Zone asset. A DC Zone asset is
any of the following.
• DC Zone business stock.
• DC Zone partnership interest.
• DC Zone business property.
Qualified capital gain. The qualified
capital gain is any gain recognized on
the sale or exchange of a DC Zone
asset that is a capital asset or property
used in a trade or business. It does not
include any of the following gain:
• Gain treated as ordinary income
under section 1245;
• Gain treated as unrecaptured section
1250 gain. The section 1250 gain must
be figured as if it applied to all
depreciation rather than the additional
depreciation;
• Gain attributable to real property, or
an intangible asset, which is not an
integral part of a DC Zone business;
and
• Gain from a related-party transaction.
See Sales and Exchanges Between
Related Persons in chapter 2 of Pub.
544.
See Pub. 954 and section 1400B for
more details on DC Zone assets and
special rules.
How to report. Report the entire gain
realized from the sale or exchange as
you otherwise would without regard to
the exclusion. To report the exclusion,
enter “DC Zone Asset Exclusion” on
Form 4797, line 2, column (a) and enter
as a (loss) in column (g) the amount of
the exclusion that offsets the gain
reported in Part I, line 6.
Any unrecaptured section 1250
gain is not qualified capital gain.
CAUTION Identify the amount of gain that
is unrecaptured section 1250 gain and
report it on the Schedule D for the form
you are filing.

!

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Exclusion of Gain From
Qualified Community Assets
If you sold or exchanged a qualified
community asset acquired after
December 31, 2001, that you held for
more than 5 years, you may be able to
exclude the “qualified capital gain.” The
qualified gain is, generally, any gain
recognized in a trade or business that
you would otherwise include on Form
4797, Part I. This exclusion also applies
to an interest in, or property of, certain
renewal community businesses.
Qualified community asset. A
qualified community asset is any of the
following.
• Qualified community stock.
• Qualified community partnership
interest.
• Qualified community business
property.
Qualified capital gain. Qualified
capital gain is any gain recognized on
the sale or exchange of a qualified
community asset that is a capital asset
or property used in a trade or business.
It does not include any of the following
gains:
• Gain treated as ordinary income
under section 1245;
• Section 1250 gain figured as if
section 1250 applied to all depreciation
rather than the additional depreciation;
• Gain attributable to real property, or
an intangible asset, that is not an
integral part of a qualified community
business; and
• Gain from a related-party transaction.
See Sales and Exchanges Between
Related Persons in chapter 2 of Pub.
544.
See Pub. 954 and section 1400F for
more details and special rules.
How to report. Report the entire gain
realized from the sale or exchange as
you otherwise would without regard to
the exclusion. To report the exclusion,
enter “Qualified Community Asset
Exclusion” on Form 4797, line 2,
column (a) and enter as a (loss) in
column (g) the amount of the exclusion
that offsets the gain reported in Part I,
line 6.

Election To Defer Gain From
Qualifying Electric
Transmission Transactions
If you sold or exchanged qualifying
electric transmission property after
October 22, 2004, and before January
1, 2008, you may elect to defer part of
the realized gain. The sale or
disposition must be made to an
independent transmission company. If
you make the election, part or all of the
realized gain is recognized ratably over
the 8-year period that begins with the
tax year that includes the date of the
disposition. The amount of gain that is

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not eligible to be recognized over the
8-year period is the excess, if any, of
the amount realized from the
disposition over the cost of the exempt
utility property purchased during the
4-year period beginning on the date of
the disposition. See section 451(i) for
more details.
To make the election, you must
attach a statement to your timely filed
return (including extensions) for the tax
year in which the qualifying electric
transmission transaction occurred
(members of an affiliated group of
corporations filing a consolidated
return, attach the election to the
consolidated tax return).
The statement must provide all of
the following details regarding the
qualifying electric transmission
transaction, including:
1. A description of the items of
property sold;
2. The date of the qualifying electric
transmission transaction;
3. The amount of proceeds realized
and the amount of gain realized;
4. A description of any exempt utility
property purchased, its cost, the date of
purchase, and the identity of the
purchaser (taxpayer or other member of
the taxpayer’s affiliated group); and
5. A representation indicating the
total cost of exempt utility property the
taxpayer intends to purchase.
Once made, the election is
irrevocable.
How to report. Report the sale or
disposition of the qualifying electric
transmission property in Part III of the
Form 4797 without regard to any
deferred gain. Enter the amounts from
lines 31 and 32 on lines 13
and 6, respectively, of Form 4797.
Figure the gain eligible for deferral
and enter it as a loss in column (g) of
line 2, but not to exceed the gain from
the transaction included on line 6. Enter
“Deferred gain under section 451(i)” in
column (a) of line 2. Enter any
remaining gain eligible for deferral as a
loss in column (g) of
line 10. Enter “Deferred gain under
section 451(i)” in column (a) of
line 10. The recognized gain for the tax
year of the disposition must equal the
gain, if any, not eligible for deferral plus
1/8 of the deferred gain.

Specific Instructions
To show losses, enclose figures in
(parentheses).
If you disposed of property you
acquired by inheritance, enter
“INHERITED” in column (b) instead of
the date you acquired the property.

Disposition by a Partnership
or S Corporation of Section
179 Property
Partners and S corporation
shareholders. If you received a
Schedule K-1 from a partnership or S
corporation reporting the sale,
exchange, or other disposition of
property for which a section 179
expense deduction was previously
claimed and passed through to its
partners or shareholders, you must
report your share of the transaction on
Form 4797, 4684, 6252, or 8824
(whether or not you were a partner or
shareholder at the time the section 179
deduction was claimed).
See the worksheet on page 5 to
figure the amount to report on Form
4797, 4684, 6252, or 8824, and to
figure any reduction in your
carryforward of the unused section 179
expense deduction. The partnership or
S corporation must provide the
following information on Schedule K-1
for the transaction.
• Description of the property.
• Date the property was acquired and
placed in service.
• Date of the sale or other disposition
of the property.
• The partner’s or shareholder’s share
of the gross sales price or amount
realized. Enter on line 1 of the
worksheet.
• The partner’s or shareholder’s share
of the cost or other basis plus the
expense of sale. Enter on line 2 of the
worksheet.
• The partner’s or shareholder’s share
of the depreciation allowed or
allowable, but excluding the section 179
expense deduction. Enter on line 3a of
the worksheet.
• The partner’s or shareholder’s share
of the section 179 expense deduction
passed through for the property and the
partnership’s or S corporation’s tax
year(s) in which the amount was
passed through. Enter on line 3b of the
worksheet your share of the total
amount of the section 179 expense
deduction passed through for the
property (even if you were not a partner
or shareholder for the tax year in which
it was passed through or you did not
deduct all or part of the section 179
expense because of the dollar or
taxable income limitations). The tax
year(s) in which the amount was
passed through are provided so you
can determine the amount of unused
carryover section 179 expense (if any)
for the property to report on
line 3c.
• If the disposition is due to a casualty
or theft, a statement indicating so, and
any additional information needed by

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the partner or shareholder to complete
Form 4684.
• If the disposition was an installment
sale made during the partnership’s or S
corporation’s tax year reported using
the installment method, any information
needed by the partner or shareholder to
complete Form 6252. The partnership
or S corporation also must separately
report the partner’s or shareholder’s
share of all payments received for the
property in the following tax years.
• If the disposition was a disposition of
property given up in an exchange
involving like-kind property made during
the partnership’s or S corporation’s tax
year, any information needed by the
partner or shareholder to complete
Form 8824.
Note. If you have a carryforward of
unused section 179 expense deduction
that includes section 179 expense
deduction previously passed through to
you for the disposed asset, you must
reduce your carryforward by your share
of the section 179 expense deduction
shown on Schedule K-1 (or the amount
attributable to that property included in
your carryforward amount).
Partnerships and S corporations.
Partnerships (other than electing large
partnerships) and S corporations do not
report these transactions on Forms
4797, 4684, 6252, or 8824. Instead,
they provide their partners and
shareholders the information they need
to report the transactions. See the
instructions for Form 1065 or Form
1120S for details on the information
that must be reported on Schedule K-1.

Line 1
Enter on line 1 the total gross proceeds
from:
• Sales or exchanges of real estate
reported to you for 2007 on Form(s)
1099-S (or substitute statement) that
you are including on line 2, 10, or 20
and
• Sales of securities or commodities
reported to you for 2007 on Forms
1099-B (or substitute statements) that
you are including on line 10 because
you are a trader with a mark-to-market
election under section 475(f) in effect
for the tax year. See Traders Who
Made a Mark-To-Market Election on
page 2 and the Instructions for line 10
on page 6.

Part I
Use Part I to report section 1231
transactions that are not required to be
reported in Part III.
Section 1231 transactions. The
following are section 1231 transactions.
• Sales or exchanges of real or
depreciable property used in a trade or
business and held for more than 1 year.
To figure the holding period, begin

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Worksheet for Partners and S Corporation Shareholders to
Figure Gain or Loss on Dispositions of Property for
Which a Section 179 Deduction Was Claimed

Keep for Your Records

Caution: See the worksheet instructions below before starting.
1. Gross sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Cost or other basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. a
Depreciation (excluding section 179 expense deduction) . . . . . . . . . . . . 3a.
b
Section 179 expense deduction . . . . . . . . . . . . . . . . . . 3b.
c
Unused carryover of section 179 expense deduction . . . 3c.
d
Subtract line 3c from line 3b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3d.
e
Add lines 3a and 3d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3e.
4. Adjusted basis. Subtract line 3e from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Gain or loss. Subtract line 4 from line 1 (see Where To Report Amounts From Worksheet, below) . . . . . . . . . . 5.
Worksheet Instructions
Caution: For a disposition due to casualty or theft, skip lines 1 and 5 and enter the amount from line 4 on Form 4684, line 20, and
complete the rest of Form 4684.
Lines 1, 2, 3a, and 3b. Enter these amounts from Schedule K-1 (Form 1065 or 1120S).
Line 3c. If you were unable to claim all of the section 179 expense deduction previously passed through to you for the property (if
any), enter the smaller of line 3b or the portion of your unused carryover of section 179 expense deduction attributable to the
property. Make sure you reduce your carryover of disallowed section 179 expense deduction shown on Form 4562 by the amount on
line 3c.
Where To Report Amounts From Worksheet
Generally, the information from the above worksheet is reported on the lines specified below for Form 4797, Part III. However, for a
disposition under the installment method, complete the lines shown below for Form 6252. For dispositions of property given up in an
exchange involving like-kind property, complete the lines shown below for Form 8824.
䊳 If line 5 is a gain and the property was held more than 1 year, report the disposition as follows.
• Complete Form 4797, line 19, columns (a), (b), and (c); Form 6252, lines 1 through 4; or Form 8824, Parts I and II.
• Report the amount from line 1 above on Form 4797, line 20; Form 6252, line 5; or Form 8824, line 12 or 16.
• Report the amount from line 2 above on Form 4797, line 21; or Form 6252, line 8.
• Report the amount from line 3e above on Form 4797, line 22; or Form 6252, line 9.
• Report the amount from line 4 above on Form 4797, line 23; Form 6252, line 10; or Form 8824, line 13 or 18.
• Complete the rest of the applicable form.
䊳 If line 5 is zero or a loss and the property was held more than 1 year, report the disposition as follows. Do not report a loss on
Form 6252; instead, report the disposition on the lines shown for Form 4797.
• Complete Form 4797, line 2, columns (a), (b), and (c); or Form 8824, Parts I and II.
• Report the amount from line 1 above on Form 4797, line 2, column (d); or Form 8824, line 12 or 16.
• Report the amount from line 2 above on Form 4797, line 2, column (f).
• Report the amount from line 3e above on Form 4797, line 2, column (e).
• Report the amount from line 4 above on Form 8824, line 13 or 18.
• Complete the rest of the applicable form.
䊳 If the property was held one year or less, report the gain or loss on the disposition as shown below. Do not report a loss on
Form 6252; instead, report the disposition on the lines shown for Form 4797.
• Complete Form 4797, line 10, columns (a), (b), and (c); Form 6252, lines 1 through 4; or Form 8824, Parts I and II.
• Report the amount from line 1 above on Form 4797, line 10, column (d); Form 6252, line 5; or Form 8824, line 12 or 16.
• Report the amount from line 2 above on Form 4797, line 10, column (f); or Form 6252, line 8.
• Report the amount from line 3e above on Form 4797, line 10, column (e); or Form 6252, line 9.
• Report the amount from line 4 above on Form 6252, line 10; or Form 8824, line 13 or 18.
• Complete the rest of the applicable form.

counting on the day after you received
the property and include the day you
disposed of it.
• Cutting of timber that the taxpayer
elects to treat as a sale or exchange
under section 631(a).
• Disposal of timber with a retained
economic interest that is treated as a

sale, or an outright sale of timber,
under section 631(b).
• Disposal of coal (including lignite) or
domestic iron ore with a retained
economic interest that is treated as a
sale under section 631(c).
• Sales or exchanges of cattle and
horses, regardless of age, used in a

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trade or business for draft, breeding,
dairy, or sporting purposes and held for
24 months or more from acquisition
date.
• Sales or exchanges of livestock other
than cattle and horses, regardless of
age, used in a trade or business for
draft, breeding, dairy, or sporting

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purposes and held for 12 months or
more from acquisition date.
Note. Livestock does not include
poultry, chickens, turkeys, pigeons,
geese, other birds, fish, frogs, reptiles,
etc.
• Sales or exchanges of unharvested
crops. See section 1231(b)(4).
• Involuntary conversions of trade or
business property or capital assets held
more than 1 year in connection with a
trade or business or a transaction
entered into for profit. These
conversions may result from (a) part or
total destruction, (b) theft or seizure, or
(c) requisition or condemnation
(whether threatened or carried out). If
any recognized losses were from
involuntary conversions from fire,
storm, shipwreck, or other casualty or
from theft and the losses exceed the
recognized gains from the conversions,
do not include any gains or losses from
such conversions when figuring your
net section 1231 losses.
Transactions to which section
1231 does not apply. Section 1231
transactions do not include sales or
exchanges of:
• Inventory or property held primarily
for sale to customers;
• Copyrights, literary, musical, or
artistic compositions, letters or
memoranda, or similar property (a)
created by your personal efforts, (b)
prepared or produced for you (in the
case of letters, memoranda, or similar
property), or (c) received from someone
who created them or for whom they
were created, as mentioned in (a) or
(b), in a way that entitled you to the
basis of the previous owner (such as by
gift); or
• U.S. Government publications,
including the Congressional Record,
that you received from the Government
other than by purchase at the normal
sales price or that you got from
someone who had received it in a
similar way, if your basis is determined
by reference to the previous owner’s
basis.

section 1231 losses from prior years
(see instructions for line 8), enter the
gain from line 7 as a long-term capital
gain on the Schedule D for the return
you are filing.

Line 8
Your net section 1231 gain on line 7 is
treated as ordinary income to the extent
of your “nonrecaptured section 1231
losses.” Your nonrecaptured section
1231 losses are your net section 1231
losses deducted during the 5 preceding
tax years that have not yet been
applied against any net section 1231
gain to determine how much net
section 1231 gain is treated as ordinary
income under this rule.
Example. You had net section
1231 losses of $4,000 and $6,000 in
2002 and 2003, respectively, and net
section 1231 gains of $3,000 and
$2,000 in 2006 and 2007, respectively.
The 2007 net section 1231 gain of
$2,000 is entered on line 7 and the
nonrecaptured net section 1231 losses
of $7,000 ($10,000 net section 1231
losses minus the $3,000 that was
applied against the 2006 net section
1231 gain) are entered on line 8. The
entire $2,000 net section 1231 gain on
line 7 is treated as ordinary income and
is entered on line 12 of Form 4797. For
recordkeeping purposes, the $4,000
loss from 2002 is all recaptured ($3,000
in 2006 and $1,000 in 2007), and you
have $5,000 of section 1231 losses
from 2003 left to recapture ($6,000
minus the $1,000 recaptured this year).

Figuring the Prior Year Losses
You had a net section 1231 loss if
section 1231 losses exceeded section
1231 gains. Gains are included only to
the extent taken into account in figuring
gross income. Losses are included only
to the extent taken into account in
figuring taxable income except that the
limitation on capital losses does not
apply.

Line 7

Line 9

Partners and S corporation
shareholders receive a Schedule K-1
(Form 1065 or Form 1120S), which
includes amounts that must be reported
on the Form 4797. Following the
instructions for Schedule K-1, enter any
amounts from your Schedule K-1 (Form
1120S), box 9, or Schedule K-1 (Form
1065), box 10, in Part I of Form 4797.
If the amount from line 7 is a gain
and you do not have nonrecaptured

For recordkeeping purposes, if line 9 is
zero, the amount on line 7 is the
amount of net section 1231 loss
recaptured in 2007. If line 9 is more
than zero, you have recaptured all of
your net section 1231 losses from prior
years.
Enter the gain from line 9 as a
long-term capital gain on the Schedule
D for the return you are filing.

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Part II
If a transaction is not reportable in Part
I or Part III and the property is not a
capital asset reportable on Schedule D,
report the transaction in Part II.
If you received ordinary income from
a sale or other disposition of your
interest in a partnership, see Pub. 541,
Partnerships.

Line 10
Report other ordinary gains and losses,
including gains and losses from
property held 1 year or less, on this
line.
Deduct the loss from a qualifying
abandonment of business or
investment property on line 10. See
Abandonments in Pub. 544 for more
information.

Securities or Commodities Held
by a Trader Who Made a
Mark-To-Market Election
Report on line 10 all gains and losses
from sales and dispositions of securities
or commodities held in connection with
your trading business, including gains
and losses from marking to market
securities and commodities held at the
end of the tax year (see Traders Who
Made a Mark-To-Market Election on
page 2). Attach to your tax return a
statement, using the same format as
line 10, showing the details of each
transaction. Separately show and
identify securities or commodities held
and marked to market at the end of the
year. On line 10, enter “Trader — see
attached” in column (a) and the totals
from the statement in columns (d), (f),
and (g). Also, see the instructions for
line 1 on page 4.

Small Business Investment
Company Stock
Report on line 10 ordinary losses from
the sale or exchange (including
worthlessness) of stock in a small
business investment company
operating under the Small Business
Investment Act of 1958. See
section 1242.
Also attach a statement that includes
the name and address of the small
business investment company and, if
applicable, the reason the stock is
worthless and the approximate date it
became worthless.

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Section 1244 (Small Business)
Stock
Individuals report ordinary losses from
the sale or exchange (including
worthlessness) of section 1244 (small
business) stock on line 10.
To qualify as section 1244 stock, all
six of the following requirements must
be met.
1. You acquired the stock after June
30, 1958, upon original issuance of the
shares from a domestic corporation (or
the stock was acquired by a partnership
in which you were a partner
continuously from the date the stock
was issued until the time of the loss).
2. If the stock was issued before
November 7, 1978, it was issued under
a written plan that met the requirements
of Regulations section 1.1244(c)-1(f),
and when that plan was adopted, the
corporation was treated as a small
business corporation under Regulations
section 1.1244(c)-2(c).
3. If the stock was issued after
November 6, 1978, the corporation was
treated as a small business corporation
at the time the stock was issued under
Regulations section 1.1244(c)-2(b). To
be treated as a small business
corporation, the total amount of money
and other property received by the
corporation for its stock as a
contribution to capital and paid-in
surplus generally may not exceed $1
million.
4. The stock was issued for money
or other property (excluding stock or
securities).
5. The corporation, for its 5 most
recent tax years ending before the date
of the loss, derived more than 50% of
its gross receipts from sources other
than royalties, rents, dividends, interest,
annuities, and gains from sales and
exchanges of stocks or securities. If the
corporation was in existence for at least
1 tax year but fewer than 5 tax years
ending before the date of the loss, the
50% test applies for the tax years
ending before that date. If the
corporation was not in existence for at
least 1 tax year ending before the date
of the loss, the 50% test applies for the
entire period ending before that date.
The 50% test does not apply if the
corporation’s deductions (other than the
net operating loss and
dividends-received deductions)
exceeded its gross income during the
applicable period. But this exception to
the 50% test applies only if the
corporation was largely an operating
company within the 5 most recent tax
years ending before the date of the loss
(or, if less, the entire period the
corporation was in existence).
6. If the stock was issued before
July 19, 1984, it must have been
common stock.

The maximum amount that may be
treated as an ordinary loss is $50,000
($100,000 if married filing jointly).
Special rules may limit the amount of
your ordinary loss if (a) you received
section 1244 stock in exchange for
property with a basis in excess of its
FMV or (b) your stock basis increased
because of contributions to capital or
otherwise. See Pub. 550 for more
details. Report on Schedule D losses in
excess of the maximum amount that
may be treated as an ordinary loss (and
all gains) from the sale or exchange of
section 1244 stock.
Keep adequate records to
distinguish section 1244 stock from any
other stock owned in the same
corporation.

Line 18a
You must complete this line if there is a
gain on Form 4797, line 3; a loss on
Form 4797, line 11; and a loss on Form
4684, line 35, column (b)(ii). Enter on
this line the smaller of the loss on Form
4797, line 11, or the loss on Form
4684, line 35, column (b)(ii). To figure
which loss is smaller, treat both losses
as positive numbers. 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.

Part III
Partnerships and S

TIP corporations, see Partnerships
and S corporations at the
beginning of the Specific Instructions.
Partners and shareholders reporting a
disposition of section 179 property
which was separately reported to you
on Schedule K-1 (Form 1065 or
1120S), see Partners and S corporation
shareholders at the beginning of the
Specific Instructions.
Generally, for property held 1 year or
less, do not complete Part III; instead
use Part II. For exceptions, see the
chart on page 1.
Use Part III to figure recapture of
depreciation and certain other items
that must be reported as ordinary
income on the disposition of property.
Fill out lines 19 through 24 to determine
the gain on the disposition of the
property. If you have more than four
properties to report, use additional
forms. For more details on depreciation
recapture, see Pub. 544.
Note. If the property was sold on the
installment sale basis, see the
Instructions for Form 6252 before
completing Part III. Also, if you have
both installment sales and
noninstallment sales, you may want to
use separate Forms 4797, Part III, for

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the installment sales and the
noninstallment sales.

Line 20
The gross sales price includes money,
the FMV of other property received,
and any existing mortgage or other
debt the buyer assumes or takes the
property subject to. For casualty or theft
gains, include insurance or other
reimbursement you received or expect
to receive for each item. Include on this
line your insurance coverage, whether
or not you are submitting a claim for
reimbursement.
For section 1255 property disposed
of in a sale, exchange, or involuntary
conversion, enter the amount realized.
For section 1255 property disposed of
in any other way, enter the FMV.

Line 21
Reduce the cost or other basis of the
property by the amount of any
enhanced oil recovery credit or disabled
access credit. However, do not adjust
the cost or other basis for any of the
items taken into account on line 22.

Line 22
Complete the following steps to figure
the amount to enter on line 22.
Step 1. Add amounts such as the
following.
• Deductions allowed or allowable for
depreciation (including any special
depreciation allowance (see the Form
4562 Instructions)), amortization,
depletion, or preproductive expenses
(see Disposition of plants and animals
in chapter 9 of Pub. 225).
• The section 179 expense deduction.
• The commercial revitalization
deduction.
• The downward basis adjustment
under section 50(c) (or the
corresponding provision of prior law).
• The deduction for qualified clean-fuel
vehicle property or refueling property,
placed in service before January 1,
2006.
• Deductions claimed under section
190, 193, or 1253(d)(2) or (3) (as in
effect before the enactment of P.L.
103-66).
• The basis reduction for the qualified
electric vehicle credit for property
placed in service before January 1,
2007.
• The basis reduction for the
employer-provided childcare facility
credit.
• The deduction for energy efficient
commercial building property.
• The basis reduction for the
alternative motor vehicle credit for
property.
• The basis reduction for the
alternative fuel vehicle refueling
property credit.

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Step 2. From the Step 1 total, subtract
amounts such as the following.
• Any investment credit recapture
amount if the basis of the property was
reduced in the tax year the property
was placed in service under section
50(c)(1) (or the corresponding provision
of prior law). See section 50(c)(2) (or
the corresponding provision of prior
law).
• Any section 179 or 280F(b)(2)
recapture amount included in gross
income in a prior tax year because the
business use of the property decreased
to 50% or less.
• Any qualified clean-fuel vehicle
property or refueling property deduction
you were required to recapture.
• Any basis increase for qualified
electric vehicle credit recapture.
• Any basis increase for recapture of
the employer-provided childcare facility
credit.
• Any basis increase for recapture of
the alternative motor vehicle credit.
• Any basis increase for recapture of
the alternative fuel vehicle refueling
property credit.
For more information on amounts
recaptured as depreciation allowed or
allowable, see chapter 3 of Pub. 544.
You may have to include
depreciation allowed or allowable on
another asset (and refigure the basis
amount for line 21) if you use its
adjusted basis in determining the
adjusted basis of the property
described on line 19. An example is
property acquired by a trade-in. See
Regulations section 1.1245-2(a)(4).
Also, see Like-Kind Exchanges under
Nontaxable Exchanges in chapter 1 of
Pub. 544.

Line 23
For section 1255 property, enter the
adjusted basis of the section 126
property disposed of.

Line 25
Section 1245 property. Section 1245
property is property that is depreciable
(or amortizable under section 185
(repealed), 197, or 1253(d)(2) or (3) (as
in effect before the enactment of P.L.
103-66)) and is one of the following.
• Personal property.
• Elevators and escalators placed in
service before 1987.
• Real property (other than property
described under tangible real property
below) subject to amortization or
deductions under section 169, 179,
179A, 179B, 179C, 179D, 179E, 185
(repealed), 188 (repealed), 190, 193, or
194.
• Tangible real property (except
buildings and their structural
components) if it is used in any of the
following ways.

1. As an integral part of
manufacturing, production, or extraction
or of furnishing transportation,
communications, or certain public utility
services.
2. As a research facility in these
activities.
3. For the bulk storage of fungible
commodities (including commodities in
a liquid or gaseous state) used in these
activities.
• A single purpose agricultural or
horticultural structure (as defined in
section 168(i)(13)).
• A storage facility (not including a
building or its structural components)
used in connection with the distribution
of petroleum or any primary petroleum
product.
• Any railroad grading or tunnel bore
(as defined in section 168(e)(4)).
Exceptions and limits. See section
1245(b) for exceptions and limits
involving the following.
• Gifts.
• Transfers at death.
• Certain tax-free transactions.
• Certain like-kind exchanges,
involuntary conversions, etc.
• Property distributed by a partnership
to a partner.
• Transfers to tax-exempt
organizations where the property will be
used in an unrelated business.
• Timber property.
Special rules. See the following
sections for special rules.
• Section 1245(a)(4) (repealed) for
player contracts and section 1056(c)
(repealed) for information required from
the transferor of a franchise of any
sports enterprise, for sales or
exchanges before October 23, 2004,
involving the transfer of player
contracts.
• Section 1245(a)(5) (repealed) for
property placed in service before 1987,
if only a portion of a building is section
1245 recovery property.
• Section 1245(a)(6) (repealed) for
qualified leased property placed in
service before 1987.
• Section 1245(b)(8) for dispositions of
amortizable section 197 intangibles.

Line 26
Section 1250 property is depreciable
real property (other than section 1245
property). Generally, section 1250
recapture applies if you used an
accelerated depreciation method or you
claimed any special depreciation
allowance, or the commercial
revitalization deduction.
Section 1250 recapture does

TIP not apply to dispositions of the
following MACRS property
placed in service after 1986 (or after
July 31, 1986, if elected). You are not
required to calculate additional

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depreciation for these properties on line
26.
• 27.5-year (or 40-year, if elected)
residential rental property (except for
27.5 year qualified New York Liberty
Zone property acquired after
September 10, 2001).
• 22-, 31.5-, or 39-year (or 40-year, if
elected) nonresidential real property
(except for 39-year qualified New York
Liberty Zone property acquired after
September 10, 2001, and property for
which you elected to claim a
commercial revitalization deduction).
ACRS property. Real property
depreciable under ACRS (pre-1987
rules) is subject to recapture under
section 1245, except for the following,
which are treated as section 1250
property.
• 15-, 18-, or 19-year real property and
low-income housing that is residential
rental property.
• 15-, 18-, or 19-year real property and
low-income housing that is used mostly
outside the United States.
• 15-, 18-, or 19-year real property and
low-income housing for which a straight
line election was made.
• Low-income rental housing described
in clause (i), (ii), (iii), or (iv) of section
1250(a)(1)(B). See the instructions for
line 26b.
Exceptions and limits. See section
1250(d) for exceptions and limits
involving the following.
• Gifts.
• Transfers at death.
• Certain tax-free transactions.
• Certain like-kind exchanges,
involuntary conversions, etc.
• Property distributed by a partnership
to a partner.
• Disposition of qualified low-income
housing.
• Transfers of property to tax-exempt
organizations if the property will be
used in an unrelated business.
• Dispositions of property as a result of
foreclosure proceedings.
Special rules. Special rules apply in
the following cases.
• For additional depreciation
attributable to rehabilitation
expenditures, see section 1250(b)(4).
• If substantial improvements have
been made, see section 1250(f).

Line 26a
Enter the additional depreciation for the
period after 1975. Additional
depreciation is the excess of actual
depreciation (including any special
depreciation allowance, or commercial
revitalization deduction) over
depreciation figured using the straight
line method. For this purpose, do not
reduce the basis under section 50(c)(1)
(or the corresponding provision of prior
law) to figure straight line depreciation.
Also, if you claimed a commercial

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revitalization deduction, figure
straight-line depreciation using the
property’s applicable recovery period
under section 168.

Line 26b
Generally, use 100% as the percentage
for this line. However, for low-income
rental housing described in clause (i),
(ii), (iii), or (iv) of section 1250(a)(1)(B),
see that section for the percentage to
use.

Line 26d
Enter the additional depreciation after
1969 and before 1976. If straight line
depreciation exceeds the actual
depreciation for the period after 1975,
reduce line 26d by the excess. Do not
enter less than zero on line 26d.

Line 26f
The amount the corporation treats as
ordinary income under section 291 is
20% of the excess, if any, of the
amount that would be treated as
ordinary income if such property were
section 1245 property, over the amount
treated as ordinary income under
section 1250. If the corporation used
the straight line method of depreciation,
the ordinary income under section 291
is 20% of the amount figured under
section 1245.

Line 27
Partnerships (other than electing large
partnerships) skip this section. Partners
must enter on the applicable lines of
Part III amounts subject to section 1252
according to instructions from the
partnership.
You may have ordinary income on
the disposition of certain farmland held
more than 1 year but less than 10
years.
Refer to section 1252 to determine if
there is ordinary income on the
disposition of certain farmland for which
deductions were allowed under
sections 175 (soil and water
conservation) and 182 (land clearing)
(repealed). Skip line 27 if you dispose
of such farmland during the 10th or
later year after you acquired it.
Gain from disposition of certain
farmland is subject to ordinary income
rules under section 1252 before the
application of section 1231 (Part I).
Enter 100% of line 27a on line 27b
except as follows.
• 80% if the farmland was disposed of
within the 6th year after it was acquired.
• 60% if disposed of within the 7th
year.
• 40% if disposed of within the 8th
year.
• 20% if disposed of within the 9th
year.

Line 28

Line 29b

If you had a gain on the disposition of
oil, gas, or geothermal property placed
in service before 1987, treat all or part
of the gain as ordinary income. Include
on line 22 of Form 4797 any depletion
allowed (or allowable) in determining
the adjusted basis of the property.
If you had a gain on the disposition
of oil, gas, geothermal, or other mineral
properties (section 1254 property)
placed in service after 1986, you must
recapture all expenses that were
deducted as intangible drilling costs,
depletion, mine exploration costs, and
development costs under sections 263,
616, and 617.
Exception. Property placed in service
after 1986 and acquired under a written
contract entered into before September
26, 1985, and binding at all times
thereafter is treated as placed in
service
before 1987.
Note. A corporation that is an
integrated oil company completes line
28a by treating amounts amortized
under section 291(b)(2) as deductions
under section 263(c).

If any part of the gain shown on
line 24 is treated as ordinary income
under sections 1231 through 1254 (for
example, section 1252), enter the
smaller of (a) line 24 reduced by the
part of the gain treated as ordinary
income under the other provision or (b)
line 29a.

Line 28a
If the property was placed in service
before 1987, enter the total expenses
after 1975 that:
• Were deducted by the taxpayer or
any other person as intangible drilling
and development costs under section
263(c) (except previously expensed
mining costs that were included in
income upon reaching the producing
state), and
• Would have been reflected in the
adjusted basis of the property if they
had not been deducted.
If the property was placed in service
after 1986, enter the total expenses
that:
• Were deducted under section 263,
616, or 617 by the taxpayer or any
other person; and
• But for such deduction, would have
been included in the basis of the
property, plus
• The deduction under section 611 that
reduced the adjusted basis of such
property.
If you disposed of a portion of
section 1254 property or an undivided
interest in it, see section 1254(a)(2).

Line 29a
Use 100% if the property is disposed of
less than 10 years after receipt of
payments excluded from income. Use
100% minus 10% for each year, or part
of a year, that the property was held
over 10 years after receipt of the
excluded payments. Use zero if 20
years or more.

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Part IV
Column (a)
If you took a section 179 expense
deduction for property placed in service
after 1986 (other than listed property,
as defined in section 280F(d)(4)) and
the business use of the property
decreased to 50% or less this year,
complete column (a) of lines 33 through
35 to figure the recapture amount.

Column (b)
If you have listed property that you
placed in service in a prior year and the
business use decreased to 50% or less
this year, figure the amount to be
recaptured under section 280F(b)(2).
Complete column (b), lines 33 through
35. See Pub. 463, Travel,
Entertainment, Gift, and Car Expenses,
for more details on recapture of excess
depreciation.
Note. If you have more than one
property subject to the recapture rules,
figure the recapture amounts separately
for each property. Show these
calculations on a separate statement
and attach it to your tax return.

Line 33
In column (a), enter the section 179
expense deduction you claimed when
the property was placed in service. In
column (b), enter the depreciation
allowable on the property in prior tax
years (plus any section 179 expense
deduction you claimed when the
property was placed in service).

Line 34
In column (a), enter the depreciation
that would have been allowable on the
section 179 property from the year the
property was placed in service through
(and including) the current year. See
Pub. 946, How To Depreciate Property.
In column (b), enter the depreciation
that would have been allowable if the
property had not been used more than
50% in a qualified business. Figure the
depreciation from the year it was placed
in service up to (but not including) the
current year. See Pub. 463 and Pub.
946.

Line 35
Subtract line 34 from line 33 and enter
the recapture amount as “other income”

Page 10 of 10

Instructions for Form 4797

14:57 - 24-OCT-2007

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

on the same form or schedule on which
you took the deduction. For example, if
you took the deduction on Schedule C
(Form 1040), report the recapture
amount as other income on Schedule C
(Form 1040).

Note. If you filed Schedule C or F
(Form 1040) and the property was used
in both your trade or business and for
the production of income, the portion of
the recapture amount attributable to
your trade or business is subject to

self-employment tax. Allocate the
amount on line 35 to the appropriate
schedules.
Be sure to increase your basis in the
property by the recapture amount.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws and
to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long
as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for
individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown
in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is
shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing, copying, assembling, and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35 hr., 23 min.
8 hr., 20 min.
9 hr., 17 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we
would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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