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Returning Member

Sale of business

How do I classify the sale of a Pepperidge Farm distributorship route (bread route)? It consists of 13 stores, and I used my own truck. The sale consisted of the route and the truck. I understand the truck will go on form 4797, but the route does not easily fit in any category. Any help?
2 Replies
Level 15

Sale of business

Did you pay for the distributorship? I would assume that you did.


Thus, the transaction sounds like the sale of a franchise which, typically, would entail capital gain (if you realized more than you paid for the distributorship) assuming you did not retain any power, right, continuing interest, etc.

Returning Member

Sale of business

Correct, I do not retain any rights in business.  I felt it was a franchise also by definition.  Which form would that best fit?  I was unsure of  Form 4797 because I felt like the franchise didn't meet any of the IRS definitions or criteria.  The business distributorship is more of a contract and from what I've looked at, the IRS considers it an ordinary gain.  Am I incorrect?

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