How to Report the Sale of Equipment on a Tax Return

You need to report sales of equipment on your taxes.

If you sell equipment during the year, such as a car or truck, then you need to report the amount of gain or loss on the sale of the equipment on your taxes. Equipment is a capital asset, so when you sell the asset, you will have a capital gain or loss. Typically, you need to report these amounts on Form 1040 Schedule D. If the asset is a business asset, you will need to use Form 4797. Reporting on Form 4797 is similar to Schedule D.

Instructions

Individual Property

1. Determine how long you had the property. If it is one year or less, then use Form 1040 Schedule D Line 1. If it is one year and one day or more, then use Form 1040 Schedule D Line 8.

2. Write the description of the property under (a).

3. Write the day you bought or acquired the property under (b).

4. Write the day you sold the property under (c).

5. Write how much you sold the property for under (d).

6. Write your basis in the property under (e). The basis is the cost of your property minus any depreciation on the property plus any amounts capitalized to the property, such as improvements.

7. Subtract (e) from (d) to find your gain or loss on the property and report the amount under (f).

References

• IRS: Form 1040 Schedule D