Drake Tax - 4797: Methods to Generate
Article #: 11481
Last Updated: September 15, 2026
To generate Form 4797, use one of the following methods:
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Method 1: To generate Form 4797 from the 4562 screen, use the IF SOLD section of the screen. Date Sold and Property Type are required entries.
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Method 2: Enter only a Date Sold on the 4562 screen, then complete the 4797 screen. Be sure to include allowed or allowable depreciation.
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Method 3: Enter data on the 4562 to recapture Section 179 expenses claimed. This method is used for assets that have not been sold, but for which business use has dropped to 50% or less. The check box Recapture because business use dropped to 50% or less must be checked on screen 4562 in order for Part IV of the form to populate.
Note If the 4562 screen is being used to report depreciation related to Form 8829, and the home was sold, Form 4797 will not be generated for that asset from entries made on the if sold section. A sale of the taxpayer's home should be reported on the HOME screen instead. Enter only the Date Sold on the 4562 screen for the taxpayer's home (where 8829 has been chosen in the For box).
For more information on Form 4797, see the Form 4797 Instructions.
Force to part
Items will flow to the applicable part of Form 4797 based on IRS guidelines. Generally:
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Part I: §1231 gains and losses not required to be reported in Part III, generally involving business property held more than 1 year.
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Part II: Ordinary gains and losses, generally including business property held 1 year or less.
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Part III: Gains on certain depreciable or recapture property, generally held more than 1 year, where depreciation or other recapture must be calculated.
If necessary, you can use the 4797 screen option Force this item to part number, to make the entries flow to the desired part. Be sure to review IRS guidelines before overriding the software's default treatment.