Form 4797, also known as the Sales of Business Property form, is used by individuals and businesses to report the sale or exchange of property that was used for business or investment purposes. Here are some points to consider regarding who should complete Form 4797:
1. Sole Proprietors: If you operate a sole proprietorship and have disposed of business property during the tax year, you should complete Form 4797 to report the gains or losses from the sale.
2. Partnerships and LLCs: If you are a partner in a partnership or a member of a limited liability company (LLC), and the partnership or LLC sold or exchanged business property during the tax year, you need to report your share of the gains or losses on Form 4797.
3. Corporations: If you own shares in a corporation and the corporation sold business property, you may need to report your share of the gains or losses on Form 4797, depending on the type of corporation (C corporation or S corporation) and your involvement in the sale.
4. Real Estate Investors: When real estate investors sell rental properties or any other property used for investment purposes, they must report the gains or losses on Form 4797.
5. Farmers: Farmers who dispose of their farm property, equipment, or livestock may be required to complete Form 4797 to report gains or losses resulting from the sale.
6. Investors in Stocks, Bonds, or Mutual Funds: While gains and losses from the sale of stocks, bonds, or mutual funds are typically reported on Schedule D, if you were engaged in a trade or business of selling stocks, bonds, or mutual funds, you may need to report those gains or losses on Form 4797.
7. Tax Professionals and Accountants: Tax professionals and accountants who assist their clients in reporting the sale or exchange of business property should also be familiar with Form 4797 and its requirements.
It's important to note that individuals or entities in any of these categories should consult with a tax professional or refer to the IRS guidelines to ensure accurate completion and reporting on Form 4797.