Hi and welcome to our site!
The issue is that you should not close your business without notifying BOE and close out your seller’s permit...
You can use the BOE-65, Notice of Close Out for Seller’s Permit, to notify.
If you simply allowed the buyer to use your seller’s permit - you might be held responsible.
Because the BOE contacted you - I guess they were not notified.
Even though you have closed out your seller’s permit, you must still report your sales
up to the closeout date. This includes any sales of fixtures or equipment that occurred as part of the closure or sale of your business. You must also report any inventory you intend to retain for your own use if that inventory was purchased without payment of sales tax
To help expedite the closeout you should separately report and identify the sale of “fixtures and equipment” and “retained inventory” on your final sales and use tax return
Sales of inventory to another retailer or to the purchaser of your business are not taxable, but should be reported as “Sales to Other Retailers for the Purpose of Resale” on your return. A resale certificate should be obtained from the buyer and saved with your records.
See following publication for reference
In additional - you should report the sale transaction
on your personal income
tax return - that is why BOE agent is asking for that information - to confirm that the business was sold.
Both the buyer and seller involved in the sale of business assets
must report to the IRS
the allocation of the sales price among section 197 intangibles and the other business assets. Use Form
8594, Asset Acquisition Statement Under Section 1060, to provide this information. The buyer and seller should each attach Form 8594 to their federal income
tax return for the year in which the sale occurred.
Seller's taxable income
is calculated for each asset = (selling price) - (basis); If the asset was purchased - the basis is its purchase price; The basis should be adjusted by any improvement expenses and depreciation
Here is the form
So far - taxing authorities
will verify following
-- if you closed out your seller’s permit
-- if you filed your final sales tax return - and correctly reported sales tax due
-- if you charges sales tax when inventory were sold to the buyer - and if not - did you retain buyers seller's permit
-- if you reported the sale transaction on your personal tax
-- if you realized any gain from the sale of your business - did you included that gain into your personal taxable income.
If there are some items you did not do - I suggest to consult with a local
CPA and you might need someone representing you with BOE.
Sorry for your situation.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.