990-US: Sale information not appearing on Form 4797 or Schedule D (FAQ)

Alerts and notices

Question

Why is sale information not appearing on Form 4797 or Schedule D?

Answer

These forms are only used to report sales of unrelated business activities for the calculation of Form 990-T. Forms 990, 990-EZ, and 990-PF report sale information without using Form 4797, Schedule D (Form 1041), or Schedule D (Form 1120).

To classify a sale as unrelated business income subject to tax on Form 990-T, go to the screen where you entered the sale information. That could be the SchD screen, the Asset module, or the Sale screen if asset detail is disabled.

  • On the SchD screen, open the Detail schedule statement and enter the activity code in the UBIT column for each item it applies to. 
  • In the asset module, for each asset, go to the Disposal tab, click the Income Classification button, and mark the Unrelated business activity field.
  • On the Sale screen, mark the Unrelated business activity field.

Under section 512(b)(5), sales of property are exempt from unrelated business tax and are not reported on Form 4797 or Schedule D unless one of the following conditions is true.

  • The property was depreciated. If depreciated, the gain reported on Form 4797 or Schedule D is the lesser of the depreciation / deductions taken or the gain realized [Reg. 1.1245-6(b)]. Losses are not reported.
  • The property was debt financed in the last 12-month period before the date of the disposition. The sale prints on Form 4797 or Schedule D based on amounts entered for each sale on Screen SchD or in the asset module in the fields related to Debt financed property. The application prepares a worksheet supporting this calculation [Reg. 1.514(a)-1(a)(1)(v)].