kanchan-textax-
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02-25-2022
11:45 AM
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Hi team,
There is sale of business, with purchase price allocation which is to be reported in Form 8594. All the assets of company were sold and get allocated according to Form 8594 and will characterized as operating income (such as assets related to Inventory, Depreciation Recapture, etc.). The remainder of the purchase price is allocated to Goodwill and is Capital Gain. There are various class of assets, how to i report the same, so has to flow through K
| Account | Asset Class | Tax Rate |
| Cash | Class I | - |
| Accounts Receivable | Class III | 0.5325 |
| Inventory | Class IV | 0.5325 |
| Fixed Assets - Depreciation Recapture | Class V | 0.5325 |
| Fixed Assets - Capital Gain | Class V | 0.371 |
| Prepaid and Other Assets | Class V | 0.5325 |
| Section 179 Intangibles, Existing Contracts, WIP | Class VI | 0.5325 |
| Residual (Goodwill) | Class VII | 0.371 |
Total Earn-outStock0.386
It is 1120s, where we made F reorganization, which caused installment sale.
I understand the gain has to flow through K1-how shall i report the same, ordinary gain and Capital gain from 100+ assets it is.
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