Hi team, There is sale of business, with purchase price allocation which is to be reported in Form 8594. All the assets of company were sold and get allocated according to Form 8594 and will characterized as operating income (such as assets related to Inventory, Depreciation Recapture, etc.). The remainder of the purchase price is allocated to Goodwill and is Capital Gain. There are various class of assets, how to i report the same, so has to flow through KAccountAsset ClassTax RateCashClass I - Accounts ReceivableClass III0.5325InventoryClass IV0.5325Fixed Assets - Depreciation RecaptureClass V0.5325Fixed Assets - Capital GainClass V0.371Prepaid and Other AssetsClass V0.5325Section 179 Intangibles, Existing Contracts, WIPClass VI0.5325Residual (Goodwill)Class VII0.371 Total Earn-outStock0.386 It is 1120s, where we made F reorganization, which caused installment sale.I understand the gain has to flow through K1-how shall i report the same, ordinary gain and Capital gain from 100+ assets it is.

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Sale of Business with goodwill and various class of asssets

Forum|Forum|4 years ago
February 25, 2022
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Hi team,

There is sale of business, with purchase price allocation which is to be reported in Form 8594. All the assets of company were sold and get allocated according to Form 8594 and will characterized as operating income (such as assets related to Inventory, Depreciation Recapture, etc.). The remainder of the purchase price is allocated to Goodwill and is Capital Gain. There are various class of assets, how to i report the same, so has to flow through K

Account	Asset Class	Tax Rate
Cash	Class I	-
Accounts Receivable	Class III	0.5325
Inventory	Class IV	0.5325
Fixed Assets - Depreciation Recapture	Class V	0.5325
Fixed Assets - Capital Gain	Class V	0.371
Prepaid and Other Assets	Class V	0.5325
Section 179 Intangibles, Existing Contracts, WIP	Class VI	0.5325
Residual (Goodwill)	Class VII	0.371