I had a client  sell their business through an asset sale. For practical purposes and with the exception of some real property remaining in the S-Corp - everything was sold. The sales agreement and subsequent 8594 is completed as follows: $660k worth of Class IV assets which is inventory, $2.4 mil on Class V, and $2mil on Class VI and VII. I have completed the Class V part as this was personal prop and real prop and I have accounted for that on Form 4797 and k-1 (Sect 179 assets). I am unclear on the other 2 - I could add the $660k to "revenue" and then zero out my inventory on COGS and that would "account" for the sale of the inventory. Is this appropriate or should "sale" on inventory go somewhere else? I have researched and it doesn't look like it should go on 4797. I am also unclear about the Class VI part of $2mil. This is basically over and above the assets that were purchased - - aka goodwill. I am not sure what form this goes on or how I account for this. I think it should long term capital gain but I am not sure where to put it. Will the client have any "basis" in this or will it all be gain? Any help would be appreciated.