Sale of a business

[Greynewfs]

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?

[abctax55 · Accepted solution]

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.

[Greynewfs]

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

[abctax55]

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.