Updated November 5, 2026. Quick answer: Worksheet E in Publication 502 figures the total gain or loss when you sell medical equipment or property whose cost you deducted in an earlier year. It takes the selling price, subtracts selling expenses and the adjusted basis from Worksheet D; a loss is not deductible, and a gain is taxable.
What Worksheet E is for
The publication says “Use the following worksheet to figure total gain or loss on the sale of medical equipment or property that you deducted in an earlier year.” It comes after Worksheet D: “Use Worksheet D to figure the adjusted basis of the equipment or property.” “Next, use Worksheet E to figure the total gain or loss on the sale of the medical equipment or property.” The taxable gain is defined as “The taxable gain is the amount of the selling price that is more than the adjusted basis of the equipment or property.” The sheet is marked “Keep for Your Records”.
The five lines
| Line | What it asks |
|---|---|
| 1 | “Enter the amount that the medical equipment or property sold for” |
| 2 | “Enter your selling expenses” |
| 3 | “Subtract line 2 from line 1” |
| 4 | “Enter the adjusted basis of the equipment or property from Worksheet D, line 5, or line 12, if applicable” |
| 5 | “Subtract line 4 from line 3. This is the total gain or loss from the sale of the medical equipment or property” |
Where a gain or a loss goes
“If you have a loss, it isn’t deductible.” “If you have a gain, it’s includible in your income.” “The part of the gain that is a recovery of an amount you previously deducted is taxable as ordinary income. Enter it on Form 1040 or 1040-SR.” “Any part of the gain that is more than the recovery of an amount you previously deducted is taxable as a capital gain.” The capital part is reported on Form 8949 and Schedule D; see the Form 8949 checkbox guide. “For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Recoveries in Pub. 525.”
Two worked examples (invented numbers)
Case 1 (computed), a gain: equipment sells for $1,500 with $100 of selling expenses, and the adjusted basis from Worksheet D is $880.
| Line | Entry | Value |
|---|---|---|
| 1 | Selling price (invented) | $1,500 |
| 2 | Selling expenses (invented) | $100 |
| 3 | Line 1 minus line 2 (computed) | $1,400 |
| 4 | Adjusted basis from Worksheet D, line 12 of the second case there (invented) | $880 |
| 5 | Line 3 minus line 4 (computed) | $520 |
The gain is $520 (computed).
Case 2 (computed), a loss: equipment sells for $400 with $50 of selling expenses against an adjusted basis of $1,200.
| Line | Entry | Value |
|---|---|---|
| 1 | Selling price (invented) | $400 |
| 2 | Selling expenses (invented) | $50 |
| 3 | Line 1 minus line 2 (computed) | $350 |
| 4 | Adjusted basis from Worksheet D, line 5 of the first case there (invented) | $1,200 |
| 5 | Line 3 minus line 4 (computed), a loss | ($850) |
The loss of $850 (computed) is not deductible. Worksheet D shows how the basis in each case is built; see the Worksheet D page.
Edition
This page reads Publication 502 (2025), the file irs.gov served on 2026-11-05. Worksheet E sits on page 19 of that edition. Check the year printed on your own copy before following a line reference.
Common mistakes
- Deducting a loss on the sale. The publication says a loss isn’t deductible.
- Leaving out selling expenses. Line 3 is the selling price less line 2.
- Using the original cost on line 4. It is the adjusted basis from Worksheet D.
- Reporting the whole gain as a capital gain. The part that recovers an earlier deduction is ordinary income.
Related: Publication 502, Worksheet D, and Form 1040 line 7.
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Answer againSources
- Publication 502 (2025), Medical and Dental Expenses: https://www.irs.gov/pub/irs-pdf/p502.pdf
- IRS, About Publication 502, Medical and Dental Expenses: https://www.irs.gov/forms-pubs/about-publication-502
Read from the IRS documents linked above on November 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.