I need to report the sale of my business. How do I do that?

[Anonymous_]

Sale of Business Property section in the program (TurboTax Home & Business).

[Rick19744]

Once again, I will reiterate that sitting down with a tax professional where you can have a one on one discussion would be significantly better.  We have very limited information or understanding of the business.

As a follow-up to your response:

• As stated previously, class IV and V items are handled differently and you have not indicated what that split is.
• We don't know how you have handled what you are calling "consumables".  
  • Are these expensed when purchased?
  • Are these sold as part of your services?
  • Without a clear understanding of these items, it is not possible to provide direction as to where these go on the tax return.
  • As noted in bullet one, the purchase price allocated to these items is important.
• Other responses have shown where to address class V property within TT.
  • Even though the equipment is fully depreciated, you will need to allocate the value associated with the class V property to all the assets.
  • You will need to indicate in TT what depreciation has been taken.
  • You will have ordinary income recapture to the extent of all depreciation previously taken.
• Class VI and VII property will be treated the same. 
  • As stated previously, unless you purchased either an intangible or goodwill in a separate transaction, this category will have a zero basis.
  • As stated previously, these assets will be reported on form 8949 which will then flow to Schedule D

[Gogis]

What if the company is an S-corp? Specifically as it relates to Class VI and VII (goodwill) assets?
Where does that sale show up on the s-corp return?
Thanks!

[Gogis]

Also, what date is entered for "date acquired" when it comes to Goodwill?

Thanks!

[Critter-3]

If you sold off goodwill then you will enter it as an asset to be sold off using the sale date as the "aquired" date. 

[Gogis]

When I do that, it wants to treat it as short term gain and treat it as operating income instead of capital gains.

Do I force 4797 section to LT?

Sorry I'm sure this is basic but it's the first time selling goodwill.

Thanks!

[Carl56]

Goodwill when entered as an asset in a business sale can be any date longer than 1 YR to establish it as Long term capitol gain

[DianeW777]

You simply enter a date that is longer than one year.  If, as in many cases, you actually created the goodwill that created this saleable asset, in your business, it actually begins on the date you began business operations. As long as you get long term treatment, the date can be any date that represents more than one year from the sales date (one year plus one day).  Then TurboTax will know to treat it as a long term transaction, providing special capital gain tax rates.

This will eliminate you forcing any section on Form 4797.

[charlie2101]

I have Turbo Tax home & business and would like to locate schedule D to report capital gains I was paid for the sale of my business.  I don't see anything referring to schedule D capital gains income.  Looking for some direction as to where to locate the form or where to enter my information.  Thank You!

[ErnieS0]

Whether Schedule D will come up depends on how the sale was reported and what type of sale it was. Generally you will have to enter the transaction yourself @charlie2101.

1. Type schedule d in Search in the top right
2. Select Jump to schedule d and follow the prompts

Rather than Schedule D, it's possible you should enter the sale of your business as Sale of Business Property
 

1. Tap the Business tab
2. Go to Less Common Business Situations
3. Start Sale of Business Property

For more info about business sales see Sale of a Business

[Anonymous_]

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@charlie2101 wrote:

I have Turbo Tax home & business and would like to locate schedule D to report capital gains I was paid for the sale of my business. 

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See https://www.irs.gov/instructions/i8594

Reporting the sale of a business can more complex than simply reporting the sale of tangible assets.

[Was_sch_C_service_business]

I think I can do this.  We sold our "clients" and "goodwill" - nothing else.  It was an installment sale.  We received a 1099-MISC for covenants.  We were a schedule C.  What TurboTax product do I need to report this sale, including preparing the 8594, sch D, etc.  Will TurboTax prepare an 8594? Thank you for the good previous responses.

[LeonardS]

No, the personal editions of TurboTax do not support Form 8594. 

You can fill out the form online print it out and include it in your return.  However, you will not be able to efile you will have to file a paper return.   On line Form 8594 https://Asset Acquisition Statement  @Was_sch_C_service_business
 

[mluap]

I sold a financial services firm (sole proprietarship): no assets aside from goodwill. How do I file?

[DianeW777]

If you are selling only goodwill and no other assets at all then you can use the following steps to report the sale of your goodwill.  

The sale of goodwill is a capital asset and should be reported on Schedule D as a sale of investment.  

You should also have Form 8594 completed (both buyer and seller do this and they should agree).  If you do not file a correct Form 8594 by the due date of your return and you cannot show reasonable cause, you may be subject to penalties.

Per the IRS, The purpose of filing the form is "Both the seller and purchaser of a group of assets that makes up a trade or business must use Form 8594 to report such a sale if goodwill or going concern value attaches, or could attach, to such assets and if the purchaser's basis in the assets is determined only by the amount paid for the assets."

This form is not available for electronic filing, so you will have to mail in your return.  For further information about the form 8594, please refer to the instructions for IRS form 8594 at the link above.

• Where do I report investment sales?

@mluap