It depends. It is possible for the payments to be amortized over time but it depends on what he actually paid for. When a business is purchased or sold a Form 8594 is required to be completed exactly the same and filed with the tax return for both the buyer and seller. Information is placed here for your convenience.
If you can provide details of all purchased related to the sale we can provide more details on what may be allowed as depreciation or amortization.
Form 8594 is not supported in TurboTax Online or TurboTax Desktop. This form should be completed and filed with your tax return, and an exact duplicate filed with your buyers tax return. This means you should mail your return.
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.
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