Sale of insurance book of business

[ejzillioux]

I sold my book of business to another agency,  I put into turbo tax that I sold/disposed of the business however nowhere does it ask me to put in any monetary amount for what I received.   Where does that go?

[KrisD15]

Was this Schedule C? 

Also, did you purchase the book or did you create it? 

[Zillioux]

Yes Schedule C and I created it

[DianeW777]

Here is where you will enter your sale of the book of business. Sale of Business Property:

1. Income and Expenses at the top
2. Scroll down to Other Business Situations
   • For TurboTax Desktop: Business Income and Expenses > Less Common Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter your sales information:
   1. Description of the Property (Machine Type)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Cost
   5. Depreciation

[Zillioux]

It's just the book of business though..  That's all that was sold.   There is no tangible property of any kind or anything to depreciate.  So as an example,  my book or clients,  generate 50,000 in commission.  I sold my book to another agency so they are just taking over my clients and they will now receive the commissions and They gave me a payment in exchange.  

[DianeW777]

You are still selling a business asset and it must be reported as indicated. It's understood there is no depreciation or amortization because you created the book of business. Simply leave that field blank. Make sure you enter a date acquired when you started the business or a later date if you choose, assuming you had the business long term. Likewise cost would be zero because you created the book and did not buy it.

This will end up on Schedule D after Form 4797 (for sale of business assets).

[Zillioux]

Thank you!!!!

Do you by chance know why Turbo Tax Home and Business when I check the box that I did dispose of my business does not prompt me to answer the questions for that form like it does all the other forms?

[DianeW777]

You're welcome! This is a question that comes up in each asset, however if you don't actually have any tangible assets to sell, then you will not see the question. There could be some additional information in the hyperlinks so I will recommend.

[Zillioux]

You have been very helpful.   One last questioin.

I sold the book last April 2024  They gave me an initial payment then.  A second payment is to be paid April this year 2025 based on the current valuation so I'm not 100 % what the actual payment will be.   How do I enter the sale price ?   Just what they paid me in 2024 ?

[DianeW777]

Yes, you can report only your 2024 payment if you choose the installment sale method. The other option is to report the full sale and then if you receive additional income in a later year you would report it the same way. 

If you want to use the installment method you can follow the steps in this link. Keep in mind that any interest payments in the contract would also be taxable income.

• How do I report an installment sale in TurboTax?
• What is an installment sale?

[Zillioux]

You are a life saver !!  Thank you for your assistance!!!