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How to fill out section 1231 property definition

01
Gather all relevant information about the property in question.
02
Determine if the property meets the criteria to be classified as section 1231 property, which includes depreciable business property and real property used in a trade or business.
03
Calculate the gain or loss from the sale of the property and report it on Form 4797.

Who needs section 1231 property definition?

01
Taxpayers who have sold or exchanged business property or real property used in a trade or business may need to fill out section 1231 property definition for tax purposes.
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Section 1231 property includes depreciable business property and real property used in a trade or business.
Taxpayers who own section 1231 property are required to report it on their tax return.
Section 1231 property can be reported on IRS Form 4797.
The purpose is to calculate the gain or loss on the sale or exchange of certain business properties.
Details of the property, purchase date, sale date, and any gains or losses.
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