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Discussion:Is form 8594 required in this sale?

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Discussion Forum Index --> Tax Questions --> Is form 8594 required in this sale?


Kathyt (talk|edits) said:

12 March 2014
My client sold most of the assets of his business to an existing business, the buyer already has a large business and just added this location to his existing business. My client sold most of the equipment and goodwill. The location was not owned by my client (the corporation) but leased, and the buyer obtained a lease with the landlord (okay the landlord is my client, just not the corporation, he personally owns the location and his corporation leased the property from him). My client did not sell a/r, a/p or inventory. Only the equipment and goodwill. He will probably keep the corporation open for a year or so (awaiting a very large BP oil spill claim) that we cannot determine the amount at this time exactly, and he also sold the remainder of his inventory in the year 2014 even though this equipment sale took place in 2013. After all of the inventory is sold, and the BP claim is finalized, then he will dissolve the corporation. So in this case, are we supposed to file the 8594 just for the equipment & goodwill (I do have a breakdown of each piece of equipment & goodwill) even though the corporation will not dissolve for another year or so?

Ckenefick (talk|edits) said:

12 March 2014
I would say 'yes.' Sounds like the buyer is doing more than acquiring the space (or use of the space). Although buyer is bringing over his own inventory, and maybe his own employees, the hard assets are being sold (equipment). In addition, there are probably some intangibles that are going that you have lumped in with goodwill. And then there's the goodwill. In essence, he is selling his operation and just holding back (1) the BP claim [a receivable] and (2) other things that have resulted from prior operations [a/r and a/p].

What kind of business: carpet store?

Kathyt (talk|edits) said:

12 March 2014
Scrap metal. I don't have a problem with filing the 8594, I have never actually filed one before but the buy/sell agreement was very specific so I have all individual asset prices with the rest going to goodwill, I just wasn't sure if you are supposed to file it if the business is not being liquidated soon after. He is selling the operation, just holding off on closing because some items just aren't determinable right now.

Ckenefick (talk|edits) said:

12 March 2014
Gotcha. Liquidation is not really relevant. Sometimes companies liquidate, sometimes they reinvest the proceeds and don't liquidate.

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