Drake Tax - 4797 - Sale of Farm Animal
Article #: 17530
Last Updated: October 18, 2024
Generally, assets held for more than a year carry to Part I and items held for 1 year or less carry to Part II of Form 4797; however, there is a special rule for cattle and horses used in a trade or business. The sale of this type of asset, is reported on Part I, Part II, or Part III depending on whether it was held for more or less than 24 months, and whether it was sold at a gain or loss. The chart from the Form 4797 Instructions details the following:
| Cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes: | Held less than 24 Months | Held 24 months or more |
|---|---|---|
| a Sold at a gain | Part II | Part III (1245) |
| b Sold at a loss | Part II | Part I |
| c Raised cattle and horses sold at a gain | Part II | Part I |
In Drake Tax, you can indicate that the asset is "cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes" by selecting FA in the Property Type drop list on the 4562 screen.