Mind if I ask another question?

Going back to my example, let's say the sales contract is for $200K, $25K is for the assets and $150K for goodwill. The seller receives $40K in year 1. Does the seller report the $25K on the 4797 part II and leave it off of the gross sales part I, line 5 of the 6252? If that's the case, do they include the full $40K in payments received or just $15K since we've already captured it on the 4797?

Or bypass the 4797, report it all on 6252 and include the $25K on the unrecaptured section 1250 gain worksheet to pay the difference in recapture and gain?