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.
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?