IRS Publication 544

A document published by the Internal Revenue Service (IRS) that provides information on how taxpayers are to treat income from the sale, exchange or disposal of property. IRS Publication 544 outlines how gains and losses on the property are calculated, whether they are considered ordinary or capital, and how to report them to the IRS. The document also indicates whether a gain is taxable or loss deductible.

Taxpayers typically must file Schedule D of Form 1040, Form 4797 (Sales of Business Property), or Form 8824 (Like-Kind Exchanges).

Individuals, businesses and estates that purchase real property from foreign persons may have to withhold income tax if the property acquired is in the United States. IRS Publication 519 has more information on how aliens are to treat U.S. tax law.

Investments, such as stocks, bonds and options, the sale of a primary (main) home, installment sales, and property transfers are not discussed in IRS Publication 544.