Sale of Business with goodwill and various class of asssets

[kanchan-textax-u]

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.

[George4Tacks]

Sell the assets through the depreciation screen.

Sell goodwill through dispositions. 

AR would be added to Sales

Inventory would be affecting cost of goods sold, so ends up in sales

I don't know earn out of stock. I think that is either dividend on 1099-div or a distribution. 

This may be helpful https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/form-8594-and-sale-of-...

[kanchan-textax-u]

There is one value for all the assets sold, but i have 100+ Assets sold so do i need to bifurcate the value of the same

[George4Tacks]

I think the easiest way is to go through each asset and enter a date of sale.

Create a depreciation schedule and from that do one 4797 sale in the dispositions screen. 

[kanchan-textax-u]

Below is the sample list of my asset, against class V fixed assets for which my sale value is lumpsum is $333,332  so how do i allocate the same as there are assets which had depreciated fully, Special Depreciation take, Long term, Short term and Prior  Section 179 is take in account.

Kindly please help and let me know how to do get value to connect to input screen.

10   WIRE SHELVINGS **	3-03-13		1,339		0		200DB HY	7		0
11   IMAC COMPUTER-JONIB **	7-24-14		1,296		0		200DB HY	5		0
12   EQUIPMENT **	7-22-14		897		0		200DB HY	5		0
13   VW PASSAT 16300-VBHICLBS	4-30-14	1-07-20	11,160		27,541	13,486	200DB HY	5		0
14   VW PASSAT 16300-VBHICLBS **	6-04-15		991		0		200DB HY	7		0
15   NEW 2015 MBZ SPRINTBR VAN **	7-21-15		19,265		19,265	18,155	200DB HY	5	0.05760	1,110
16   NEW 2014 MBZ CARGO VAN	3-23-15	1-17-20	22,143		22,143	20,868	200DB HY	5	0.05760	638
17   CAMERAS INSTALLE~-VANS **	7-23-15		797		797	751	200DB HY	5	0.05760	46
18   APPLE MF839LL W/SOPTWARE **	6-01-15		1,693		0		200DB HY	5		0
19   APPLIE COMPUTBR,LG SCREE **	8-03-15		1,484		0		200DB HY	5		0
21   FORRLIFT 16500-WAREHOUS **	7-01-14		22,325		2,189		200DB HY	7	0.08930	2,189
22   APPLE COMPUTER 15500-0FFICE *	4-23-16		2,656		0		200DB HY	5		0
23   VERSATBL PHONE SYSTEM **	4-16-16		9,930		0		200DB HY	5		0
24   LOAN FEES - SBA LOAN **	11-14-16				13,662	2,163	150DB HY	20	0.05713	781

[kanchan-textax-u]

How do i do the bulk asset sales. How the gain will be reflecting on Form 4797

[George4Tacks]

https://proconnect.intuit.com/community/federal-taxes/help/entering-a-bulk-sale/00/3683

[George4Tacks]

This return would be so much easier in Lacerte. ProConnect is very accessible, but Lacerte is now offering a similar online. The basic input for each is similar, but the navigation in Lacerte is substantially easier for something like this. 

[kanchan-textax-u]

The link is not opening. Kindly provide the latest one

[George4Tacks]

Try again. The link is fine or just search for "bulk sale" in articles