4797

Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2))

Agency
IRS
Revision
2025
Fillable fields
182
Pages
2
Official source
IRS form page
Checked
October 21, 2026
Fill 4797 online
Page 1 of form 4797

Form 4797: Sales of Business Property

Form 4797, Sales of Business Property, also covers involuntary conversions and recapture amounts under sections 179 and 280F(b)(2). The IRS page says it reports the sale or exchange of property, the involuntary conversion of property and capital assets, the disposition of noncapital assets and of capital assets not reported on Schedule D, and certain section 179 property dispositions by partnerships and S corporations.

It also figures recapture when the business use of section 179 or listed property decreases to 50% or less, and reports ordinary gains or losses for a trader in securities or commodities who made a mark-to-market election under section 475(f).

This page covers the 2025 form. The form says to attach it to your tax return. Gains and losses flow from it to Schedule D, Schedule 1 (Form 1040) or the business return. You can fill out the PDF free in your browser on this page and download it without an account.

What's on Form 4797

Lines 1a to 1c

Gross proceeds reported to you on Forms 1099-B or 1099-S that you include on line 2, 10 or 20, and the gain and loss from partial dispositions of MACRS assets.

Part I: property held more than 1 year

Sales or exchanges of property used in a trade or business and involuntary conversions from other than casualty or theft. Lines 2 to 9 figure the net section 1231 gain or loss.

Part II: Ordinary Gains and Losses

Lines 10 to 18 cover ordinary gains and losses, including property held 1 year or less, amounts from other parts and forms, and the line 18a and 18b split for individual returns.

Part III: depreciation recapture

Gain from disposition of property under sections 1245, 1250, 1252, 1254 and 1255, with columns for up to four properties A through D on lines 19 to 32.

Part IV: business use of 50% or less

Lines 33 to 35 figure recapture under section 179 in column (a) and section 280F(b)(2) in column (b) when business use drops to 50% or less.

How to fill out Form 4797

  1. 1

    Header and line 1

    Enter the name shown on the return and the identifying number. On line 1a, enter the gross proceeds from Forms 1099-B or 1099-S that you include on line 2, 10 or 20.

  2. 2

    Pick the part for each sale

    The instructions chart says where to make the first entry. For example, depreciable trade or business property held more than 1 year goes in Part III at a gain and Part I at a loss. Property held 1 year or less goes in Part II.

  3. 3

    Part III first

    Complete lines 19 to 29b for each property, then lines 30 to 32. Line 31 goes to line 13. Line 32 goes to line 6, or to Form 4684 for the casualty or theft portion.

  4. 4

    Part I, lines 2 to 9

    List each sale in columns (a) to (g), add amounts from Forms 4684, 6252 and 8824, and combine on line 7. Line 8 is for nonrecaptured net section 1231 losses from the 5 preceding tax years.

  5. 5

    Part II and line 18

    Enter other ordinary gains and losses on line 10, combine lines 10 to 16 on line 17, and for individual returns complete lines 18a and 18b. Show losses in parentheses.

  6. 6

    Part IV if business use dropped

    Complete lines 33 to 35. The instructions say the line 35 recapture amount is reported as other income on the same form or schedule on which the deduction was taken.

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Where it goes and related forms

Attach to your tax return

The form says "Attach to your tax return." Its attachment sequence number is 27. It has no separate mailing address.

Where the totals go

A line 7 or line 9 gain goes to Schedule D as a long-term capital gain. Line 18b goes to Schedule 1 (Form 1040), Part I, line 4. Other returns use the appropriate line.

Other forms that feed it

The instructions name Form 4684 for casualties and thefts, Form 6252 for installment sales and Form 8824 for like-kind exchanges. Results from those forms go on lines 3 to 5 and 14 to 16.

Capital assets

The instructions say Form 8949 reports sales of capital assets not reported on another form or schedule, and Schedule D figures the overall gain or loss.

Selling a whole business

The instructions say a sale of a group of assets that make up a trade or business is also reported on Form 8594, Asset Acquisition Statement.

More than four properties

Part III has columns for four properties. The instructions say to use additional forms for more.

Related forms

Who files Form 4797?

  • Individuals with business property

    Individuals who sold or exchanged property used in a trade or business. Line 18b carries the ordinary gain or loss to Schedule 1 (Form 1040), Part I, line 4.

  • Partners and S corporation shareholders

    The instructions say amounts from Schedule K-1 (Form 1065), box 10, or Schedule K-1 (Form 1120-S), box 9, go in Part I, and section 179 property dispositions passed through on a K-1 are reported here.

  • Partnerships, S corporations and corporations

    Line 7 points partnerships and S corporations to Schedule K of Form 1065 or Form 1120-S. Line 18 sends the total for all except individual returns to the appropriate line of the return.

  • Traders with a mark-to-market election

    The instructions say a trader with a section 475(f) election in effect reports gains and losses from securities or commodities held in the trading business on line 10.

  • Owners of a home used for business

    The instructions say a home also used for business may need Form 4797 for the part used for business, or the entire property if used entirely for business.

The form gives separate directions for individuals, partners and S corporation shareholders, partnerships and S corporations, and all other returns.

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Questions about Form 4797

What is Form 4797 used for?

The IRS page says it reports sales or exchanges of property, involuntary conversions, dispositions of noncapital assets and of capital assets not on Schedule D, certain section 179 dispositions, and recapture when business use drops to 50% or less.

Is Form 4797 the same as Form 8949?

No. The instructions say Form 8949 reports the sale or exchange of capital assets not reported on another form or schedule. Form 4797 covers business property and recapture.

Which part do I use for a sale?

The instructions chart depends on the type of property, gain or loss and holding period. Property held 1 year or less generally goes in Part II. Depreciable property held longer goes in Part III at a gain.

What are nonrecaptured section 1231 losses?

The instructions say they are net section 1231 losses deducted during the 5 preceding tax years that have not yet been applied against a net section 1231 gain. They go on line 8.

Do partnerships report section 179 property sales on Form 4797?

The instructions say partnerships and S corporations do not report those transactions on Form 4797. They give partners and shareholders the information on Schedule K-1.

Where do I send Form 4797?

It is not mailed on its own. The form says to attach it to your tax return.