Key Takeaways
- Federal disposition reporting requires Forms 4797, Schedule D, and potentially 8824, 6252, and 8960.
- Inconsistencies between forms are common audit triggers—cross-check all numbers against settlement statements.
- State withholding for out-of-state sellers and 1031 clawback provisions can significantly impact net proceeds.
- Retain all disposition records indefinitely for 1031 exchanges; minimum 6 years for standard sales.
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Test Your Knowledge
1.Which IRS form reports the sale or exchange of property used in a trade or business?
2.Which form is specifically used to report a like-kind (1031) exchange?
3.What is the main audit trigger related to disposition tax reporting?