skip navigation
Search Help
Navigation Help

Tax Map Index

Tax Topic Index

Affordable Care Act
Tax Topic Index

Tax Topics

About Tax Map Website
Publication 334

Chapter 3
Dispositions of
Business Property(p16)


If you dispose of business property, you may have a gain or loss that you report on Form 1040. However, in some cases you may have a gain that is not taxable or a loss that is not deductible. This chapter discusses whether you have a disposition, how to figure the gain or loss, and where to report the gain or loss.


Useful items

You may want to see:

 544 Sales and Other Dispositions of Assets
Form (and Instructions)
 4797: Sales of Business Property
 Sch D (Form 1040): Capital Gains and Losses
See chapter 12 for information about getting publications and forms.

What Is a Disposition
of Property?(p16)

A disposition of property includes the following transactions. For details about damaged, destroyed, or stolen property, see Publication 547, Casualties, Disasters, and Thefts. For details about other dispositions, see chapter 1 in Publication 544, Sales and Other Dispositions of Assets.

Nontaxable exchanges.(p17)

Certain exchanges of property are not taxable. This means any gain from the exchange is not recognized and you cannot deduct any loss. Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive.
Like-kind exchanges.(p17)
A like-kind exchange is the exchange of property for the same kind of property. It is the most common type of nontaxable exchange. To be a like-kind exchange, the property traded and the property received must be both of the following.
Report the exchange of like-kind property on Form 8824, Like-Kind Exchanges. For more information about like-kind exchanges, see chapter 1 in Publication 544.

Installment sales.(p17)

An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. If you finance the buyer's purchase of your property, instead of having the buyer get a loan or mortgage from a third party, you probably have an installment sale.
For more information about installment sales, see Publication 537, Installment Sales.

Sale of a business.(p17)

The sale of a business usually is not a sale of one asset. Instead, all the assets of the business are sold. Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss.
Both the buyer and seller involved in the sale of a business must report to the IRS the allocation of the sales price among the business assets. Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred.
For more information about the sale of a business, see chapter 2 of Publication 544.