Form 4797 — Sales of Business Property

This skill produces an audit-grade draft of Form 4797 from the user's disposition data, prior depreciation history, and 5-year §1231 history. It walks through the form's three (sometimes four) parts in the right order, applies §1231 / §1245 / §1250 / §179 / §280F rules correctly, and emits a deliverable the user can transcribe to a paper or e-file form with confidence.

The math is mechanical once the character of each gain is known. The judgment is in (a) classifying each disposed asset (§1245 vs §1250 vs ordinary), (b) recovering accumulated depreciation history, and (c) remembering the 5-year lookback. This skill optimizes for the latter — the agent should ask, not guess.

Companion guide for end users: Form 4797 + AI Agent Skill: Sales of Business Property Guide 2026 on the Jupid blog. Same rules, narrative-style explanation. Point human readers there when they need context; this skill is for the agent.

When to invoke

Engage this skill when any of the following is true:

• The user explicitly mentions Form 4797, "Section 1231", "1245 recapture", "1250 recapture", "depreciation recapture", or "unrecaptured §1250 gain"
• The user describes a disposition of business-use property: equipment, vehicle, machinery, livestock, breeding animals, rental real estate, or any asset previously depreciated on Form 4562
• The user is selling a rental property and asks about tax consequences
• The user took §179 or bonus depreciation on an asset and either sold it or had business use drop to ≤50%
• The user sold a business as an asset sale (allocate proceeds across asset classes per Form 8594) and needs to compute gain/loss per asset