Sale of Bookstore

[sjmurphy1088]

We sold a Schedule C bookstore business in 2025.  The price was a slight premium over the value of the inventory.  There were fully depreciated assets in the store – shelves, chairs, desks, computer software, etc.  Does the depreciation need to be recaptured, and taxed as ordinary income, or is the full gain a capital gain? 

Where do we enter this information?

[PatriciaV · Accepted solution]

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. If you claimed Section 179 deduction on any of the assets, there might be recapture income. But in general, the sale of fully depreciated assets is typically all gain.

To report that you sold your business, choose the Business tab in the TurboTax Home & Business header. Continue and click "I'll choose what I work on." Click Update beside Business Income & Expenses.

1. Select "edit" beside the business you sold.
2. Edit your Business Profile.
3. Check the box for "I sold or disposed of this business..." Continue to the page titled "Let's gather your business info.:
4. Scroll down to "Less Common Business Situations. Click Start beside "Sale of Business Property."
5. Check the box for "Sales of business or rental property that you haven't already reported."
6. Under this topic, work with each asset to report that it was sold. For fully depreciated assets, the sales price may be zero, as long as the total sales price equals the proceeds you received.

Note: If you're unsure whether or not you sold for a profit, answer "Yes." Enter the information, and TurboTax let you know.

Complete the sale information. Note blue links have helpful information.

For more help, see:

• TurboTax Tax Tip: Closing a Business
• IRS Pub 544 Sales and Other Dispositions of Assets.

[sjmurphy1088]

Thanks.  This was very  helpful. 

I also clicked on the link you provided for Turbotax tax tip: closing a business.  This referenced a Form 8594: Asset Acquisition Statement under Section 1060.  This form is not available in Turbotax Home and Business.  The same information seems to appear on form 4797, which is included.  Is that sufficient to only include the information on form 4797?  If Form 8594 is required, I am not sure how I would do that since I file electronically with Turbotax.

[MaxA1]

Form 4797 is sufficient.  Form 8594 is informational and helps the IRS keep track of what was sold and to who.  Although it's recommended to include this form, the IRS won't come knocking at your door if you don't file it.

[AmeliesUncle]

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@MaxA1 wrote:

Form 4797 is sufficient.  Form 8594 is informational 

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No, Form 8594 is required.  The IRS isn't asking for that as as optional form and the instructions even say "must" file (under the certain conditions).]

Just because TurboTax does not provide that required form does NOT mean it is optional.

Shame on you for saying it is optional and shame on Intuit for not providing a required form.