Publication 544: Sales And Other Dispositions Of Assets (2023)

Publication 544, also known as "Sales and Other Dispositions of Assets," is the IRS guidebook explaining how to report gains or losses from selling property on your federal tax return. It covers everything from calculating your gain/loss to understanding different types of property and reporting requirements.

What is Publication 544?

  • Issued by the IRS, it explains the tax rules surrounding "dispositions," which encompasses selling, exchanging, gifting, or otherwise losing ownership of assets.
  • Covers diverse assets, including stocks, real estate, vehicles, and business property.

What's inside Publication 544?

A. Calculating gains/losses: Learn how to determine your gain or loss by subtracting the adjusted basis (your original cost + improvements) from the amount received.

B. Ordinary vs. capital gains/losses: Understand the distinction between these classifications and their impact on your tax liability. Capital gains generally receive more favorable tax treatment.

C. Treating gains/losses: The publication details how to handle different situations, such as business property, partial dispositions, and nontaxable exchanges.

D. Reporting on tax returns: It provides guidance on reporting gains and losses on appropriate forms like Schedule D and Form 8949.

Key updates for 2023:

  • Clarification on the treatment of cryptocurrency transactions, including sales, exchanges, and mining.
  • Updated information on the Qualified Business Income Deduction (QBID) and how it may impact gains from certain business property sales.
  • Revisions to the rules for deducting casualty and theft losses.

For the current year's Publication 544, click here.