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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28288
Experience:  Taxes, Immigration, Labor Relations
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What forms, beside 8594, do I need to file my taxes sell of

Customer Question

What forms, beside 8594, do I need to file my taxes for the sell of a sole proprietorship in 2015? Is goodwill entered on schedule D, long term capital gains? Is there an adjusted cost basis for the goodwill, if I originally received it, by exchanging my stock in "our" medical corporation for patient charts, contact info, along with some equipment and set up my own private practice (sole proprietorship) in 1983. RE: If the stock was worth $50,000 and the goodwill was $40,000, can I adjust that $40,000 off the amount that I received for the sell of my practice in May of 2015? RE If the amount attributed to goodwill in my practice sell = $100,000. Can I use an adjusted basis of $60,000 in determining the long term capital gains tax to be paid?
Everything else that I received for the practice sell, that was not attributed to goodwill, equipment, supplies, non compete agreement etc is taxed as "normal" income, correct? Where is this entered on the 1040? Misc income?
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

What forms, beside 8594, do I need to file my taxes for the sell of a sole proprietorship in 2015?

You will have a list of assets listed on that form 8494 - correct.

So - you will need to report the sale of each asset separately.
mainly - you will use form 4797 to report disposition of business assets.

Results will be transferred to schedule D

Expert:  Lev replied 1 year ago.

Is goodwill entered on schedule D, long term capital gains?

If you are selling goodwill - we need to verify

- if that is a self-created goodwill - the gain will be ordinary income

If that goodwill was purchased and amortized - the amortization recaptured will be ordinary income and the rest will be capital gain.

Is there an adjusted cost basis for the goodwill, if I originally received it, by exchanging my stock in "our" medical corporation for patient charts, contact info, along with some equipment and set up my own private practice (sole proprietorship) in 1983.

If the goodwill was PURCHASED - and some assets you provided in exchange of the goodwill - the value of these assets is your basis in the goodwill.
I assume that you correctly reported the sale of these assets back in 1983 using fair market value of these assets and amortized the goodwill after that.

Let me know if you need any help with reporting.

Otherwise,

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