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Form 4797 Tax Calculator

Classify a business-property disposition into ordinary recapture, unrecaptured Section 1250 gain, and remaining Section 1231 gain.

01INPUTS
Business Property Sale
02RESULTS
The sale produces an estimated $240,000 Form 4797 gain or loss and approximately $44,000 of federal tax before state tax, NIIT, installments, and other return items.

Estimated federal tax

$44,000

Ordinary income/recapture

$0

Long-term Section 1231 gain

$160,000
Amount realized $480,000 · adjusted basis $240,000 · unrecaptured Section 1250 gain $80,000 · Section 1231 loss $0.
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What this tool covers

Calculation scope

  • Uses depreciation allowed or allowable in adjusted basis.
  • Separates Section 1245 and Section 1250 treatment.
  • Applies the five-year Section 1231 loss lookback entered by the user.

Frequently asked questions

What is Section 1245 recapture?

For depreciable personal property, recognized gain is generally ordinary income up to depreciation allowed or allowable, with any remaining qualifying long-term gain entering Section 1231.

Is all real-estate depreciation taxed at 25%?

No. Unrecaptured Section 1250 gain is taxed at a maximum 25% rate, while remaining gain can follow long-term capital-gain rules after Section 1231 netting. Actual tax depends on the full return.

What is the five-year Section 1231 lookback?

Current net Section 1231 gain can be recharacterized as ordinary income to the extent of nonrecaptured net Section 1231 losses from the preceding five years.

Sources

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