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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4023
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I have bought and sold a business in the same year it was a

Customer Question

I have bought and sold a business in the same year
it was a grocery store
bought 120K
Sold 103K
How can I record this on my taxes since I sold at a loss?
My FMV of the assets purchased as
Inventory - 10K
Assets - 10K
then on sale - I sold back 55K worth of inventory and the same assets. can you please give me the journal entry and where I record this in my return? Is this goodwill for the amount over the assets - then what do I do since I lost money on the deal?
Thank you
Submitted: 5 months ago.
Category: Tax
Expert:  PDtax replied 5 months ago.

Hi from Just Answer. I'mCustomer I'll assist.

I assume you purchased and sold personally. So, your entries might look like this:


Hard assets (inventory, equipment, etc.) xx

Soft (customer list, goodwill) xx

(cr) debt xx

(cr) cash xx


Cash yy

(cr) sales yy

Expenses-cash zz

Depreciation/amortization qq

(cr) cash zz

(cr) acc depr/amort qq

Now, on to sale:

Cash aa

Debt bb

Acc depr - equip qq

Acc amort - cust list, goodwill qq

Loss on sale tt

(cr) assets xx

Report operations on schedule C.

Report the sale on Form 4797.

I suggest you engage a tax pro to record the purchase and sale, as there is likely two complex tax transactions that really suggest a pro's help.

Thanks for asking at Just Answer. Positive feedback is appreciated once I have answered your questions. I'mCustomer

Expert:  PDtax replied 4 months ago.

Hi again.Customerhere. Just following up on my response to your request.

If this met your needs, please rate so that the question can be closed for our month end.