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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28082
Experience:  Taxes, Immigration, Labor Relations
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I am recording the sale of an S corp. Sold for $100,000.

Customer Question

Hi. I am recording the sale of an S corp. Sold for $100,000. $40,000 was allocated to fixed assets and $60,000 was Goodwill. On the sellers books when he bought the company he had $10,000 of goodwill. Does the ^0,000 purchase of goodwill get split between the 4797 for 10,000 and schedule D for 50,000?
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Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
As the goodwill was purchased - you need to adjust the basis by amortization - and will report the sale of the goodwill on form 4797.There is only ONE goodwill.
Customer: replied 6 months ago.
Thank you.
Expert:  Lev replied 6 months ago.
Please be sure - you adjust the basis of the goodwill by amortization.The gain will be reported as long term - but amortization will be recaptured as ordinary income.Let me know if you need any help with reporting.
Expert:  Lev replied 6 months ago.
..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.

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