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

[tonyg]

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

[IRonMaN]

Zero

[IRonMaN]

Or -1 if you use Lacerte🙂

[joshuabarksatlcs · Accepted solution]

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?

[IRonMaN]

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

[joshuabarksatlcs]

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. 

[IRonMaN]

But ten bucks says it is the only answer in this case💵

[sjrcpa]

I would have gone with one of Phoebe's shiny nickels. 😉

[joshuabarksatlcs]

Yes, I tend to think too much at times

@tonyg  - I'll bet with IronMan.  You come on and say he's wrong.  We split the $10 and you keep @sjrcpa's shiny nickels from Phoebe..

[tonyg]

These intangibles were all earned through good hard work.  After further research and the comments received.   going with  zero, zilch, nada

[tonyg]

Iron man is right on

[joshuabarksatlcs]

@IRonMaN

I concede.  Just wired you $10.

Bank charge: $19.95

please send $9.95 to bank.

Thanks.