The gain or loss on land sold within one year of purchase is recorded on which one of the following forms or schedules?
A)Form 4797 if the sale was an asset held for investment purposes by a taxpayer who is a sole proprietor.
B)Schedule C if the sale was an asset used in a trade or business of a sole proprietorship.
C)Schedule D if the sale was an asset used in a trade or business by a sole proprietor who also files a Schedule C.
D)Form 4797 if the sale was an asset used in a trade or business by a sole proprietor.

Question

Quizplus · Accepted Answer

Form 4797 is used to report the sale of assets used in a trade or business, including land. Since the land was used in a trade or business by a sole proprietor, the gain or loss on the sale should be reported on Form 4797. Schedule C is used to report income and expenses from a sole proprietorship's trade or business but is not used to report the sale of assets. Schedule D is used to report capital gains and losses, including those from the sale of assets held for investment purposes, but is not typically used to report gains or losses from the sale of assets used in a trade or business.

The Gain or Loss on Land Sold Within One Year