U.S. · Tax forms
Form 4797 line 1b, MACRS partial dispositions.
Which partial dispositions you must report, which you may elect, and how line 1c fits.
Line 1b is the total amount of gain you are including on lines 2, 10 and 24 because of partial dispositions of MACRS assets. Line 1c is the matching total of loss on lines 2 and 10. Some partial dispositions are elective and some are required.
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Result
What the 2025 Form 4797 says
| Item | Meaning | What the IRS says |
|---|---|---|
| Line 1b | Total partial-disposition gain | Enter the total amount of gain that you are including on lines 2, 10 and 24 due to the partial dispositions of MACRS assets |
| Line 1c | Total partial-disposition loss | Enter the total amount of loss that you are including on lines 2 and 10 due to partial dispositions of MACRS assets |
| Elective partial disposition | You may choose to report | You may elect to recognize a partial disposition of a MACRS asset and report the gain, loss or other deduction on a timely filed return (including extensions) for the year of the disposition |
| Required: sale of a portion | Must report | Sale of a portion of a MACRS asset |
| Required: involuntary conversion | Must report | Involuntary conversion of a portion of a MACRS asset other than from a casualty or theft |
| Required: like-kind exchange | Must report | Like-kind exchange of a portion of a MACRS asset (Form 4797, line 5 or 16) |
| How to label an election | Description column | Include the words “Partial Disposition Election” in the description of the partially disposed asset |
| What MACRS assets include | Buildings and other depreciable property | Buildings (and their structural components) and other tangible depreciable property placed in service after 1986 that is used in a trade or business or for the production of income |
What a partial disposition is
A MACRS asset such as a building can lose a piece: a roof is torn off and replaced, or part of it is sold. The instructions let you elect to recognize that partial disposition, and make it mandatory in three cases: a sale of a portion, a non-casualty involuntary conversion of a portion, and a like-kind exchange of a portion.
Where the gain shows up
The gain or loss is reported on Part I, II or III as applicable, using the words “Partial Disposition Election” in the description when you elect. Line 1b then adds the partial-disposition gain you included on lines 2, 10 and 24, and line 1c the loss included on lines 2 and 10.
Casualty and theft are different
The required list excludes a casualty or theft. For a portion of a MACRS asset lost that way, the Form 4684 instructions for line 20 say to enter the adjusted basis of the disposed portion.
Worked example
A company has $1,200 of partial-disposition gain on line 2 and $300 on line 24. Line 1b is $1,500. If it also has a $400 partial-disposition loss on line 10, line 1c is $400. Names and figures are made up; the basis math for the disposed portion is in Regulations section 1.168(i)-8.
More line pages in this set
Related lines: Form 4797 Line 1a, Form 4797 Line 6.
Sources
- Instructions for Form 4797 (2025): the line-by-line instructions on this page. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Form 4797, Sales of Business Property (2025): the printed line wording and arithmetic on the form. Read November 2, 2026.
Tax year 2025 form and instructions. Line labels were read from the IRS PDF posted on the date read; line numbers, dollar limits and cutoff years change between editions, so check them against the form for your tax year. This page does not compute the basis of a disposed portion; see Regulations section 1.168(i)-8. Names in worked examples are made up.
Frequently asked questions
What is Form 4797 line 1b?
The total amount of gain you are including on lines 2, 10 and 24 due to the partial dispositions of MACRS assets.
Is a partial disposition election required?
Not always. It is elective in general, but three kinds are required: a sale of a portion, a non-casualty involuntary conversion of a portion, and a like-kind exchange of a portion.
How do I note an election?
Put the words “Partial Disposition Election” in the description of the partially disposed asset.
Where do the losses go?
On line 1c, which totals partial-disposition losses included on lines 2 and 10.
Where are the detailed rules?
In the Form 4797 instructions under Partial Dispositions of MACRS Property, and Regulations section 1.168(i)-8.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.