J.K. Lasser's Small Business Taxes 2023

CHAPTER 6Gains and Losses from Sales of Business Property

• Section 1231 Gains and Losses
• Sale‐Leasebacks
• Installment Sales
• Recapture
• Involuntary Conversions
• Abandonment, Foreclosure, and Repossession of Property
• Sale of All the Assets of the Business
• Opportunity Zone Business Transactions

Alert

At the time this book was published, Congress was considering tax changes that could affect 2022 tax returns and planning for 2023. Check the online Supplement in February 2023 at www.jklasser.com or www.BigIdeasForSmallBusiness.com to see what changes have been enacted and when they become effective.

Businesses hold a unique category of assets called Section 1231 property. This category is named after the section in the Internal Revenue Code that created them. Upon the disposition of these assets, you can realize the best of both possible worlds—capital gain treatment for profitable sales and ordinary loss treatment for sales that result in a loss. Gain may be recognized all at once or spread out through an installment sale.

You may also realize gains or losses from other transactions involving business property, including involuntary conversions, abandonment or repossession of property, or the sale of all of the assets of the business. And your business may become an Opportunity Zone business and enjoy special tax breaks.

Complex rules govern the overall treatment of these transactions. (The treatment of capital gains and losses from other property is also discussed ...