Entering Data for an Asset Sale In Lacerte

[Jay Wettig]

I have a client that has sold the business and we are treating the business as an asset sale. I have allocated the purchase price to the individual assets and entered this on the asset disposition page of Lacerte for the LLC. When I look at the forms, the K-1's show ordinary income instead of long-term capital gain. What am I doing wrong?

[George4Tacks · Accepted solution]

Are you filing Form 8594?

Is there depreciation recapture on the sale of assets? 

What asset would you expect to have long term gain?

[Jay Wettig]

Yes, there is depreciation recapture. Would there be a better way to show this sale than a sale of assets in order to show all the gain as long-term capital gain?

[sjrcpa]

Gain is ordinary to the extent of depreciation taken. Also sale of inventory, AR would be ordinary, too.