1065 Goodwill/Sched D (not portfolio income)

Forum|Forum|4 years ago
August 23, 2021
3 replies
17 views

Client sold business. I know that Goodwill goes on Sched D as LT Cap Gain, but am told by a fellow tax professional (using other-than-ProSeries) that I should be able to find a check-box on Sched D in 1065 to indicate that this is not a portfolio sale. ProSeries directed me to this Accountants Community site. Anyone have answers on this? (I've not been able to locate such a check-box in ProSeries.)

ProSeries Professional

This topic has been closed for replies.

Best answer by sjrcpa

"indicate that this is not a portfolio sale" The point of this is mainly to not subject it to Net Investment Income Tax. Is that a potential issue in this return? Might there be input to say not subject to NIIT?

Or is there an adjustment field for Form 8960 Line 5b? or maybe 5c.

Or is there investment interest expense?

EDIT: P.S. I don't use ProSeries but maybe these hints help you find what you're looking for.

PATAX

Level 12

I have had Goodwill sales several years ago not on 1065 but I believe on 1040, but I can never recall seeing what you're stating... Maybe it is changed or maybe I am wrong... maybe take a look at the K1 worksheet and something may be on there that you're looking for..

sjrcpaAnswer

Level 15

"indicate that this is not a portfolio sale" The point of this is mainly to not subject it to Net Investment Income Tax. Is that a potential issue in this return? Might there be input to say not subject to NIIT?

Or is there an adjustment field for Form 8960 Line 5b? or maybe 5c.

Or is there investment interest expense?

EDIT: P.S. I don't use ProSeries but maybe these hints help you find what you're looking for.

The more I know the more I don’t know.

R

rblmom12Author

Level 2

8960 hints helped; ty. Correct re; "...not subject it to Net Investment Income Tax." (Yes, that's the issue in this return.)

T

Terry53029

Intuit Community Champion

If it were an asset only sale the goodwill is the amount received over and above the basis in assets, and would be reported on 4797. The gain would be carried to schedule D, and I believe would be subject to the NIT. Need more details to give you a better answer.