The gain or loss on the sale of property held as an investment is recorded on which one of the following forms or schedules?

A) Form 4797 if the sale was from an asset used for investment purposes by a taxpayer who purchased it with company money as a sole proprietor.
B) Schedule D if the sale was an asset used in a trade or business by a sole proprietor.
C) Schedule D if the sale was an asset used for investment purposes by a taxpayer.
D) Form 4797 regardless if the asset was purchased for investment if the taxpayer is a sole proprietor.

Question

Michele Dalton · Accepted Answer

Final Answer : C, Explanation :  Schedule D is used to report gains or losses from sales of capital assets held for personal use or investment purposes. Form 4797 is used to report gains or losses from the sale of business property, including assets used in a trade or business by a sole proprietor. Therefore, choice A and D are incorrect. Choice B is incorrect because it only applies to assets used in a trade or business, not those held for investment purposes. So, the best choice is C.

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