In any case he has a gain upon sale and it would sure be
> taxable.
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> If this is business equipment, it is reported on a 4797 and
> ends up ordinary income. If personal use property, long
> term gain, not a collectible unless the Secretary has
> determined that musical instruments are collectibles.
Form 4797 is used for sale of business assets and provides inputs to various other tax forms. Recapture of depreciation produces an entry of ordinary income on(assuming he used the instrument as an employee under misc. income on Form 1040. The profit from price appreciation on business equipment above the orignal basis before depreciation is a capital gain so Form 4797 carries entries to Sch D where the calculations are performed. Bill Patch
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