IRS Form 8594

hlb0103 — Tue, 25 Mar 2025 20:25:21 GMT

I acquired a mobile home park in December 2024. All of the homes are tenant owned. I own the land, the utilities and laundry room with equipment. Do I need to file IRS form 8594? I have had various CPAs provide differing points of view. One said no as I acquired a “single property”, and Form 8594 is geared for asset acquisitions that essentially acquire the assets of a trade or business in which goodwill or other Section 197 intangible assets could be a part of the transaction. My purchase agreement didn’t allocate any of the purchase price to anything. I have a cost segregation study in the works, and it seems to me that if I cost seg on my tax returns, then it’s not a “single asset”.

As this is considered commercial real estate investment, does that count as a “trade or business” or is it an investment? As my spouse is a “RE professional”, this will not be considered passive income.

Re: IRS Form 8594

DianeW777 — Tue, 25 Mar 2025 21:23:33 GMT

It does count as trade or business. Filing the Form 8594 is required when a business is sold, not everyone does it I'm afraid. Part of the requirements are as follows.

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.

It may have been good for you to have the breakdown for land, and laundry room with equipment. There is different tax treatment for the seller depending on the allocation of the sales proceeds and for you, the buyer, for expensing certain amounts for equipment.

It's up to you at this point if you want to pursue it or determine your own breakdowns.

topic IRS Form 8594 in Business & farm

IRS Form 8594

Re: IRS Form 8594