1040-US: Reporting gain from an asset disposed in a casualty or theft when there is depreciation recaptures on Form 4797

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Question

How does UltraTax CS report gain from an asset disposed of in a casualty or theft when there is depreciation recaptured on Form 4797?

Answer

If you have a long-term gain from a casualty or theft of depreciable property, you may have to recapture part or all of the gain as ordinary income and report the gain on Form 4797, Part III. To report the gain on Form 4797, Part III, enter X in the Gain reported on Form 4797, page 2 field on Screen 4684B. The casualty or theft also needs to be entered in Screen Sale; enter X in the Disposition due to casualty/theft field. When all or part of the gain must be recaptured, the capital portion will be reported on Form 4684, line 33, and "Gain is calculated on 4797 page 2 and included in 4684, line 33" will print at the bottom of Form 4684, page 2. The ordinary portion of the gain will be reported on Form 4797, line 13.

Related topic: Casualties and thefts FAQs (1040)

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