Report the business as if you bought it from the bank. The interest portion of your payment would be a business expense. As far as other items and their deduction, it depends on what you actually purchased. Your cost of each property associated with the purchase must match the same amount used by the seller.
- Goodwill - Section 197 Intangible- Acquired goodwill is amortized straight-line over 15 years
- Equipment - 7 or 5 year property as a rule
- Building - Depreciated over 39 years (nonresidential real estate)
Most importantly is that both the buyer and seller must have the exact same information on Form 8594. Use the link to print the form and complete it. A second option would be e-file your tax return and then file an amended return attaching only that form.
Who must file Form 8594?
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
- the purchaser's basis in the assets is determined only by the amount paid for the assets.
When To File
Generally, attach Form 8594 to your income tax return for the year in which the sale date occurred.
If the amount allocated to any asset is increased or decreased after the year in which the sale occurs, the seller and/or purchaser (whoever is affected) must complete Parts I and III of Form 8594 and attach the form to the income tax return for the year in which the increase or decrease is taken into account.
Update here with additional details if you require further assistance.
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