How do I report business sale proceeds?
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The sale of a business is comprised of the sale of individual physical assets (if any) and the sale of intangible assets such as goodwill. You will need to tell TurboTax you've sold the business and then record the sale of any assets or goodwill.
To tell TurboTax you've sold the business in TurboTax Home & Business:
To tell TurboTax you've sold the business in TurboTax Business:
The sale of goodwill is a capital asset and should be reported on Schedule D. You should also have Form 8594 completed (both buyer and seller do this and they should agree). If you do not file a correct Form 8594 by the due date of your return and you cannot show reasonable cause, you may be subject to penalties.
Per the IRS, The purpose of filing the form is "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 if the purchaser's basis in the assets is determined only by the amount paid for the assets."
This form is not available for electronic filing, so you will have to mail in your return.
For further information about the form 8594, please refer to the instructions for IRS form 8594 at the following link:
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