Sale of Business

[tax2009fw]

I operated my business in 2012 for few months as a sole proprietorship (Schedule C). After that I sold the business that included assets and goodwill. Should I complete form 4797 - Sales of Business Property only? Or I should file together with Form 8594 - Asset Acquisition Statement?

Please, help!

 

[kirby]

You have to file both. And note that the buyer also has to file an 8594 and irs will compare the two forms as to how the assets were allocated.

 

[tax2009fw]

Thank you!

 

[tax2009fw]

By the way, where do I enter the part of goodwill?
Please, help again! Thank you in advance.

 

[kirby]

On form 8594 goodwill is a class vii asset. And reporting goodwill is good for seller but not for buyer. That is why your sales contract should have specified that buyer would agree to file the 8594 to match yours. If they do not match, irs may adjust the gain.