 Important instructions determine the correct part to use depending on the type of property sold and how long you held it for. You will use different parts of Form 4797 to report the transaction. Was it long term, short term, do you have recapture involved? Calculate the basis. So the basis is kind of like the cost of the property, but it could be a little bit different than the cost depending on, because you might have done something to the property which could have altered the basis. But in essence, the cost of the property, when you sell property, how much did you buy it for? How much did you sell it for? Most equipment, you would think you would sell at a loss because you bought it and then you sold it at a price that's less than what you bought it for. But you also have depreciation. So we're really talking about the depreciated cost that you sold it for. And again, depreciation could be accelerated oftentimes in the tax code, which could result in having a lower kind of basis that you're calculating the gain on. So to determine your gain or loss, you'll need to know the property's basis, which is generally its cost adjusted for improvements, depreciation, and any prior year losses. Okay, so then we have the recapture of depreciation. Some or all of the gain on depreciable property may be treated as ordinary income due to depreciation recapture rules, especially for section 1245 and section 1250 property. So again, if you sold equipment at a gain, that would think that it would lead to believe that you over depreciated it because you were allowed to do so with accelerated depreciation, getting favorable tax rates on the deduction resulting in the IRS wanting to recapture or tax the gain at those same ordinary income tax rates as opposed to more favorable or lower tax rates on that. Okay, so reporting to other forms, depending on the transaction, you may also need to report gains or losses on other tax forms such as schedule D form 1040 for capital gains and losses. Schedule D most commonly used for individual taxpayers to report like sales of stocks and bonds, for example.