Question

Bizrate Electronics, Inc.

A “C” Corporation

For the Year Ended December 31, 2018

                Bizrate Electronics was organized on February 22, 2018, by Jon Jones and Billy Burt. Jon contributed $270,000 cash and SBUX stock (acquired 01/01/2017) worth $30,000 for 60% of Bizrate stock, while Billy contributed $200,000 cash for 40% of the stock. Jon’s social security number is 123-45-6789 and Billy’s is 987-65-4321. Bizrate’s employer ID number is 12-3456789. Bizrate began business on March 1, 2018. Bizrate is a retail electronics outlet located at 118812 Josey Lane, Louisville, KY 40018. Bizrate uses the accrual method of accounting, the first-in, first-out (FIFO) inventory method, and a calendar year.

               

a. Includes salaries: Jon Jones $200,000, Billy Burt $50,000.

2. Depreciation for tax purposes $112,700.

3. $2,500 is allocable to the investments in stock. The remainder is related to Bizrate’s business.

4. $6,000 in fees were incurred in organizing Bizrate.

5. Includes $5,000 of premiums for term life insurance on Jon and Billy. Bizrate is the beneficiary of these policies. In addition, $4,300 of the health insurance premiums are attributable to coverage for Jon and his family, and $3,900 are attributable to coverage for Billy and his family.

6. Sold 500 shares of SBUX stock for $35,000 on December 1, 2018. The stock had been purchased by Jon on July 1, 2004 for $20,000 and was contributed by him on February 22, 2018, when it was worth $30,000. Also, on December 1, 2018 sold 100 shares of Grand View, Inc. for $2,000. The stock had been purchased on March 1, 2018 for $3,000. At no time did Bizrate own more than 1% of the outstanding stock of these corporations.

7. Sold a delivery truck on September 23, 2018 for $35,000. The Truck had originally been purchased on May 1, 2018 for $33,400. Depreciation taken for book purposes was $7,000. Depreciation taken for tax purposes was $9,350.

8. Bizrate owns less than 20% of the outstanding stock of each of these corporations.

I need help with IRS form 4797. I have no idea how to fill one out??? please help

Answer 1

4797 Form Department of the Treasury Internal Revenue Service Name(s) shown on return Bizrate Electronic Sales of Business Property OMB No. 1545-0184 (Also involuntary Conversions and Recapture Amounts 2019 Under Sections 179 and 280F(b)(2)) Attach to your tax return. Attachment Go to www.irs.gov/Form4797 for instructions and the latest information. Sequence No. 27 Identifying number 12-3456789 1 Enter the gross proceeds from sales or exchanges reported to you for 2019 on Form(s) 1099-B or 1099-S (or substitute statement) that you are including on line 2, 10, or 20. See Instructions . . . . . Part Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft-Most Property Held More Than 1 Year (see instructions) (e) Depreciation (1) Cost or other 2 (a) Description (b) Date acquired (c) Date sold (d) Gross (g) Gain or loss) allowed or basis, plus Subtract (t) from the of property (mo., day, yr.) (mo., day, yr.) sales price allowable since improvements and sum of (d) and (e) acquisition expense of sale 500 shares of SBUX stock 01-07-2004 1-12-2018 $350001 $50000 -$15000 100 shares of Grand view 1-12-2018 $2000 $2000 Delivery truck 01-05-2018 23-09-2019 $35000 $2350 $334001 $750 3 3 4 5 6 7 Gain, if any, from Form 4684, line 39. . . . . . . . . . . . . . . . . . . . . . . . Section 1231 gain from installment sales from Form 6252, line 26 or 37. . . . . . . . . . . . . . Section 1231 gain or (loss) from like-kind exchanges from Form 8824 . . . . . . . . . . . . . . Gain, if any, from line 32, from other than casualty or theft . . . . . . . . . . . . . . . . . Combine lines 2 through 6. Enter the gain or loss) here and on the appropriate line as follows . . . . . . . Partnerships and S corporations. Report the gain or loss) following the instructions for Form 1065, Schedule K, line 10, or Form 1120-S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below. Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you didn't have any prior year section 1231 losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the Schedule D filed with your return and skip lines 8, 9, 11, and 12 below. Nonrecaptured net section 1231 losses from prior years. See instructions. . . . . . . . . . . . . LO -$13750

Page 2 Form 4797 (2019) Part III Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 (see instructions) 19 (a) Description of section 1245, 1250, 1252, 1254, or 1255 property: (mo., day. yr.) A 100 shares of grand view (b) Date acquired (c) Date sold (mo, day.yr.) 01-12-2018 Property A Property B Property C | Property D These columns relate to the properties on lines 19A through 19D. 20 Gross sales price (Note: See line 1 before completing.). 21 Cost or other basis plus expense of sale..... 22 Depreciation (or depletion) allowed or allowable.. . 23 Adjusted basis. Subtract line 22 from line 21... $2000 $0 21 $0 $2000 25a ol 0 25b 26a 24 Total gain. Subtract line 23 from line 20 25 If section 1245 property: a Depreciation allowed or allowable from line 22 . .. b Enter the smaller of line 24 or 25a. 26 If section 1250 property: If straight line depreciation was used, enter -- on line 26g, except for a corporation subject to section 291. a Additional depreciation after 1975. See instructions . b Applicable percentage multiplied by the smaller of line 24 or line 26a. See instructions. . . . . . . . C Subtract line 26a from line 24. If residential rental property or line 24 isn't more than line 26a, skip lines 26d and 26e d Additional depreciation after 1969 and before 1976.. e Enter the smaller of line 26c or 26d...... f Section 291 amount (corporations only)..... g Add lines 26b, 26e, and 266...... 26b 26c 26d 26e 266 269