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AndyC132
New Member

How do I enter the sale of my business in TurboTax Self-Empolyed?

 
4 Replies
AndyC132
New Member

How do I enter the sale of my business in TurboTax Self-Empolyed?

I was self-employed for most of 2019.  On November 1st, 2019, I sold my business (a sole-owner LLC) for cash.  How do I record the sale of the business in TurboTax Self Employed?  

Thanks.  

Carl
Level 15

How do I enter the sale of my business in TurboTax Self-Empolyed?

At the beginning of the business section one of the screens has a selection on it for "I sold or otherwise disposed of this business in [tax year]. You must select that option and press on "as if" you still own the business.

WHen you get to the business summary screen, you have to work through income and expenses, even if those amounts are all zeros.

Next, you must work through the Business Assets section, and if any assets are listed there you must show your disposition of each and every asset one at a time. Start working through the first asset and on the screen that ask, indicate that YES you DID STOP USING this asset in [tax year]. Then continue working the asset through to report it's disposition - be it sold, removed for personal use, given away, stolen, destroyed, whatever.

Note that you must show your disposition for each and every asset listed, individually.

After you're finished with all the assets, if your business claimed ANY vehicle use at ANY time you were in business, then you will need to work through the business vehicle section to show the disposition of the vehicle - even if that vehicle was a personal vehicle not used 100% for the business. Most likely, your disposition of the vehicle would be "removed for personal use", beucase while not unheard of, it's rare that the sale of a business reported on SCH C would include the vehicle in that sale too.

Finally, if your business carrys inventory and you still have unsold inventory, then you must make your EOY inventory balance $0. To do that, on the COGS screen simply indicate that all remaining inventory was “removed from the business for personal use” and this will make your EOY Inventory balance $0.

Once you've completed all the above, just work it through to the end, and this will be the last year you file a SCH C for this specific business that you no longer have.

AndyC132
New Member

How do I enter the sale of my business in TurboTax Self-Empolyed?

Thanks very much for your reply.  

I am using TurboTax Self-Employed, online addition.  

My business only has one asset, a laptop, and that was fully expensed the year I bought it under Section 179.  No inventory.  

In Self-Employed, I click through to "Self employment income and expenses" and then click "Edit" next to my business.  Under "General Info" I have selected "Yes" under "Stopped work in 2019." 

As I click through that section there is a screen that says "Tell us if any of these situations apply" and the three options are "I sold my business to a related party," "I reported the sale using the installment sale method," and "I exchanged the business in a like-kind exchange transaction."  None of those are true (I sold the business for cash to another business I had no relation to) so I click "None of these apply."  

Then I proceed to enter all of my income and expenses for the year through November 1st.  

The issue of the sale of the business never comes up from that point on?  

How do I report the sale price of the business?  

 

Thanks.  

tagteam
Level 15

How do I enter the sale of my business in TurboTax Self-Empolyed?

If what you sold was a group of assets that included goodwill, then both you and the buyer need to file Form 8594, a form which is not supported by any version of TurboTax.

 

See https://www.irs.gov/pub/irs-pdf/f8594.pdf

 

Regardless, with respect to the sales price and personal goodwill, the allocation of the sales price to goodwill is generally reported as the sale of a capital asset (i.e., capital gain). Therefore, you would report that sale in the Investment Income section (Stocks, Mutual Funds, Bonds, Other). 

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