This flowchart provides guidance to the examiner on the tax treatment of the disposition of property.

Start Here

This is the start of the flowchart

Process 1 - Did you experience an actual property disposition?

If yes, go to process 2

If no, go to process 3

Process 2 - Was property sold?

If yes, go to process 10

If no, go to process 7

Process 3 - Did you experience a constructive property disposition?

If yes, go to process 4

If no, go to process 11

Process 4 - Was property permanently withdrawn from trade or business?

If yes, go to process 5

If no, go to process 11

Process 5 - Is this tangible personal property?

If yes, go to process 6

If no, go to process 11

Process 6 - Has property been scrapped or moved to a supplies account?

If yes, go to process 10

If no, go to process 11

Process 7 - Was property exchanged or transferred?

If yes, go to process 10

If no, go to process 8

Process 8 - Was property physically abandoned or discarded?

If yes, go to process 9

If no, go to process 11

Process 9 - Is this irrevocable?

If yes, go to process 10

If no, go to process 11

Process 10 - This is a taxable event

Process 11 - Not a taxable event