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Greynewfs
Level 3
June 10, 2020
Solved

Sale of a business

  • June 10, 2020
  • 1 reply
  • 1 view

Taxpayer sold his business for one lump sum.  There were assets and inventory of goods for resale.  All assets had been fully depreciated.  How do I report this.  What do I do with the ending inventory on Sch C?

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Best answer by abctax55

Wouldn't ending inventory be zero, if all sold?

Sale of the inventory (even in a bulk sale) is reported just like any other sale of inventory - on Schedule C.

Assets sold go on F 4797.

1 reply

abctax55
abctax55Answer
Level 15
June 10, 2020

Wouldn't ending inventory be zero, if all sold?

Sale of the inventory (even in a bulk sale) is reported just like any other sale of inventory - on Schedule C.

Assets sold go on F 4797.

HumanKind... Be Both
    G
    GreynewfsAuthor
    Level 3
    June 15, 2020

    That is what I thought.  Just looking for confirmation, because that will make his SE tax thru the roof.  Thank you.

     

    abctax55
    abctax55
    Level 15
    June 15, 2020

    Why?.... isn't he selling the inventory basically at cost?  That's been my experience in the past.

    And any gain on the other items won't hit Sch C.

    HumanKind... Be Both
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