Selling a business -- how to determine "ordinary income" and "capital gains"?

[JDEKWeeks]

Hello! I've been a TurboTax user for more than a decade now.  I think it's a very good, easy to understand program, but I don't know how to use it to forecast what I should expect next year:  

I just sold my concrete coatings franchise.  I purchased it in June 2015 and sold it in March of 2025.  The original equipment set is obviously fully depreciated.  I purchased some additional equipment in October of 2023 and took the Section 179 deduction so that is also fully depreciated.  I did purchase a generator in summer of 2021 that I never did take any depreciation on (it cost about $1,000). The startup and amortization costs have been $1,667 yearly (over how many years I really don't know -- TurboTax has been doing the depreciation and amortization for me).  Can someone briefly tell me how to take the sales price and divide it up between capital gains and ordinary income?  I'm trying to get some idea of how big the "tax bite" is going to be next year (filing in 2026 for tax year 2025).  Thanks!

[ThomasM125]

What you need to do is assign the sale price to the assets as is appropriate and report their sale individually in Turb0Tax. The remainder of the sale for the value of goodwill would be reported as an investment sale. You can use IRS Form 8594 to make the allocation.

The asset sales will generate ordinary income up to a maximum of 25% to the extent of depreciation allowable on them up to their gain on sale. The rest of the gain on sale of assets will be taxed at capital gain tax rates. All other gains will be taxed at capital gains tax rates, which are 15% or 20% depending on your income.