sale of business

[Teri Kerns]

Hello, sold 40 unit apartment complex, several assets listed separately, due to remodel over 2 year period, beginning in 2009.  Not sure how to figure the amounts. This is an installment sale. Thanks

[Critter-3 · Accepted solution]

You will sell off all the assets listed individually and you will have to calculate the proration of the sales price and cost of sale yourself as the program will not do this for you automatically.

Ok ... a simple example of ratios ...  if you have more assets than the example then you will have more lines.  Remember if you divide a big number into a littler number you get a % ...  thus 5000/100,000 = 5%

       original  cost basis          ratios                  Sales price             cost of sale 

home    80000                   80%                          160,000               8,000

land       15000                   15%                           30,000                 1,500

roof        5000                        5%                           10,000                   500 

totals     100,000                100%                        200,000               10,000

All you need to enter into the program is the % of sales price & % of cost of sale for each asset ... IGNORE the depreciation taken as it is immaterial for the sales of the assets. 

[Teri Kerns]

Thanks for the reply. On the dispose of asset screens, it is asking for a dollar amount. I have approximately 50 or so assets set up for this LLC. Sold March 2023.  Say the total sales price is 3 million. I have the buildings as 1 asset, there are 20 total buildings, one asset, the rest of assets are, like roof, windows, cabinetry, etc.  Assets were set up as the buildings were remodeled over a 2 year period.  Do I add the original cost of say, the first asset for the buildings, then add prior depreciation, and current depreciation.  I'm really confused on how to get the cost of the assets. and not sure where the recapture comes into play.  Thanks for any help. Have never done the sale of a business. It's in an installment sale, husband and I are the banker.

[Rick19744]

Since you apparently don't have a sales document that breaks out the sales price by asset group, etc., I would use the method noted by @Critter-3.  Drop your assets original price into an excel worksheet, determine the percentage, and let excel determine the sales price allocation.  You then enter those amounts into TT.

This could be challenged, may not lead to the best allocation, however, it is all you have at the moment.

[Rick19744]

To reply to your specific question, recapture will be determined and handled by TT when you complete the Installment Sales form 6252.

This will also handle the gain you pick up each year.

[Critter-3]

Excel and patience are your best friends ... exercise them both well and then take your time completing the return.