Level 3

How do I determine the basis of intangible property sold on installment?

Forum|Forum|4 years ago
September 28, 2021
11 replies
44 views

my client sold his practice that included goodwill and patient records on installment agreement, these are both section 197 business intangibles. What do i use as the basis for installment sales form 6252

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IRonMaN

Level 15

Zero

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IRonMaN

Level 15

Or -1 if you use Lacerte🙂

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joshuabarksatlcs

Level 9

Before you jump right into zero, zilch, nada - or -1 for Lacerte - you may want to consider other factors:

Generally, did the owner acquire the intangibles in ways other than building them up?

Examples:

Intangibles purchased before a certain month of 1993? (Beginning year for Sec 197's 15-year amortization.)

Inherited goodwill? Surviving spouse of a business run by the couple?

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IRonMaN

Level 15

But if ain’t on the balance sheet, it is zero, zilch, nada, -1.

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joshuabarksatlcs

Level 9

In most cases, true. Yet:

1. Arguably, under certain facts and circumstances, one might find it revivable say with Form 3115.

2. Many Sch C clients don't show up with a balance sheet.

My point was just that zero, zilch nada -1 etc. ain't the only answer.

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