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My client is a financial adviser. He purchased a book of…

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My client is a financial...
My client is a financial adviser. He purchased a book of business. The terms were the lesser of $500,000 or 33% of the billings over 6 years. He is on the accrual basis. How should he account for this purchase for tax purposes?It was recorded on the books as a $500,000 loan payable and about $401,000 of goodwill.His former CPA filed form 8894 with his 2015 business return showing goodwill (class VI and VII) of $401K, class V (fixed assets) of $74,000, and class III (accounts receivable) of $25,000. Another complication is that my client says he never purchased any furniture.Please answer and provide references to the code, regs, and/or court cases.
Submitted: 4 months ago.Category: Tax
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Answered in 31 minutes by:
3/8/2018
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 4 months ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,087
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Hi from Just Answer. I'm PDtax, and can assist. But your project suggests much more work than your deposit pays for.

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Customer reply replied 4 months ago
$500 is a little high. Can you do it for $250? The main thing I need to know is how the transaction should be recorded for tax purposes. Hopefully that narrows the scope. If you have dealt with this situation in the past it should be easy. it seems like a common situation to me.
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