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A
anepcar
Level 3
January 17, 2020

Purchase of LLC Company

  • January 17, 2020
  • 1 reply
  • 3 views

Is the price purchased for the company not deductible, outside basis, till they close the company or re-sell it. The tax payer purchased the company not just the assets, so it is just a change of ownership as far as the company is concerned.  Can the access price be amortized as goodwill over 15 years as an attachment to his K-1, for his outside basis

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    1 reply

    George4Tacks
    George4Tacks
    Level 15
    January 18, 2020

    Look at the details of the purchase agreement to determine what you bought, also look carefully at the IRS 8594 that you filed for the sale. It should give you a substantive basis to make the deductions you want. 

    Answers are easy. Questions are hard!
      A
      anepcarAuthor
      Level 3
      January 19, 2020

      Is the 8594  filed with the 1065 since it is the new member who is purchasing the whole company, not just the assets, in order to use the step up basis election. 

      George4Tacks
      George4Tacks
      Level 15
      January 19, 2020
      I believe you have answered your own question.
      Purchase is just like buying stock. Since you mentioned 1065: Don't forget B-1 and 8308. How many partners?
      Answers are easy. Questions are hard!
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