Thanks for clearing up my confusion on the absence of the 8594… That helped!
My wife and I sold her health care clinic in 2021 to another physician in town. For simplicity sake, we categorized the sale price as 100% goodwill, as the limited amount of tangible property assumed by the purchaser was negligible. The business was a husband/wife LLC treated as a disregarded entity by the IRS (community property state (AZ)), so I reckon the sale follows the pattern used for sale of a sole proprietorship?
My question is how to report this goodwill? From various threads, I get that self-created goodwill is a Section 197 intangible asset, which is treated as a short-term capital gain. Where I get confused is how that goodwill should be reported—on Schedule D or on Form 4797 (or both)?
Tod in AZ
