Business equipment is purchased on March 10,2011,used in the business until September 29,2011,and sold at a $23,000 loss on October 10,2011.The equipment was not suitable for the work the business had purchased it for.The loss on the disposition should have been reported in the 2011 Form 4797,Part:
A) I.
B) II.
C) III.
D) IV.
E) This transaction would not be reported in the Form 4797.

Question

Quizplus · Accepted Answer

The loss on the disposition of business equipment should be reported on Form 4797, Part II, which is used for reporting the sale or exchange of property used in a trade or business. Since the equipment was used in the business for a significant period of time, it qualifies as property used in a trade or business and the loss on its sale should be reported on Part II of Form 4797.

Business Equipment Is Purchased on March 10,2011,used in the Business