topic Need to help in recording goodwill impairment (or, reallocation of a decrease in consideration) in TurboTax Business in Get your taxes done using TurboTax

Need to help in recording goodwill impairment (or, reallocation of a decrease in consideration) in TurboTax Business

Rhyme2096 — Sun, 10 May 2020 23:55:19 GMT

In 2019, my partner and I formed an LLC and purchased an ongoing value with a significant amount for goodwill. It so happens that the seller has been unable to secure a key third party approval which has made the value goodwill drastically lower, if not zero.

I prepared Form 8594 in which I recorded the goodwill impairment (or, "reallocation of a decrease in consideration" to use the language of the Form 8594 instructions) in Part I & III.

My question is how to record Goodwill and "decrease" or impairment in TurboTax Business. If I record Goodwill as an asset using step-by-step method and designate it as intangible under Section 197, it automatically amortizes over 15 years. I cannot figure out a way to enter the "impairment" as a deduction, although I am able to manually enter the opening and ending values for Goodwill in Balance Sheet but, in the absence of a deduction for the impairment, it throws off Balance Sheet by that amount.

I'd highly appreciate help in this matter.

Re: Need to help in recording goodwill impairment (or, reallocation of a decrease in consideration) in TurboTax Business

Anonymous — Mon, 11 May 2020 08:09:58 GMT

goodwill impairment is not deductible for tax purposes. it is for accounting purposes.

part III is when buyer & seller agree to reallocation or reduction

the IRS will compare buyer/seller's 8594's and may audit both taxpayers if they don't agree

haven't you already asked this question?

Re: Need to help in recording goodwill impairment (or, reallocation of a decrease in consideration) in TurboTax Business

Rhyme2096 — Mon, 11 May 2020 14:23:47 GMT

Thanks.

I asked a related question about Form 8594 but not about goodwill impairment.