Part I- Property held more than 1 year -
Part I of Form 4797 can be used to record section 1231 transactions that are not mandated to be recorded in Part III.
Part II- Property held less than 1 year -
If a transaction can't be reported in Part I or Part III of Form 4797 and the property isn't reported on Schedule D as a capital asset, report the transaction in Part II.
Part III- Section 1245 -
Property which includes tangible personal property such as furniture and equipment, that is subject to depreciation. Also included is intangible personal property, such as patents and licenses, that are subject to amortization. Section 1245 property does not include buildings and structural components.
Part III- Section 1250 -
Includes all real property that can be depreciated including leaseholds if they are subject to depreciation (buildings, decks, shingles, etc.)
Part III- Section 1252 -
If you disposed of farmland that was held for less than 10 years and you were allowed deductions (relating to soil and water conversation expenditures, etc.) for the land, the excess of (a sale, exchange, or involuntary conversion) or the fair market value of the farm land (in the case of any other disposition), then part of this gain must be treated as ordinary income.
Part III- Section 1254 -
Is any new or used tangible or intangible personal property that has been or could have been subject to depreciation or amortization. Section 1254 property includes intangible drilling and development costs, exploration costs, and costs for developing mining operations.
Part III- Section 1255 -
If you receive certain cost-sharing payments on property and you exclude those payments from income, the excess of (a sale, exchange or involuntary conversion) or the fair market value (in the case of any other disposition) you must treat part of the gain as ordinary income. This is described in section 126 of the Internal Revenue Code.
For more information regarding property types, please see the IRS instructions.