Level 7

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Instructions for entering S Corp asset sale

Forum|Forum|1 year ago
February 12, 2025
2 replies
27 views

Are there any PS instructions for entering an asset sale in Form 1120S? My search hasn't found anything.

I'm trying to determine the mechanics of recording the sale of inventory so that the tax treatment is correct and separated from the fixed asset gain, goodwill, etc.

Thank you for your help.

ProSeries Professional

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Best answer by sjrcpa

Yes, I have that covered. Thanks.

So, since AR and inventory purchases are included in normal operating profit, are only the fixed assets and goodwill purchases included in the gain calculation and the profit % for F 6252?

Thank you.

Yes.

sjrcpa

Level 15

Sale of inventory is Page 1 income and there is COGS.

The more I know the more I don’t know.

D

david3Author

Level 7

Thank you.

I forgot to mention that this is also an installment sale.

How is goodwill entered in PS?

Thank you.

sjrcpa

Level 15

Can't report ordinary income on installment basis. All taxable in year of sale.

I don't use ProSeries so can't help with that.

The more I know the more I don’t know.

TaxBandit

Level 4

Is this an asset sale or sale of inventory? You mentioned both terms.

Asset sale is entered in the asset entry area under dispositions.

Inventory sale is listed as ordinary income.

D

david3Author

Level 7

Thank you for helping with this.

It's an asset sale with a partial payment and a buyer note.

The purchaser is buying AR (seller uses the accrual basis), inventory, fixed assets, and goodwill, customer/vendor list, digital art, and domain name. There is a lump sum total for the goodwill and other intangibles. The other intangibles are not on the seller's balance sheet.

I already entered the sale of fixed assets on each asset's disposition section.

I think I am getting hung up on everything being included in the gain - AR, inventory, and goodwill. That's why I was asking where these items are reported in PS so that the K-1 includes the correct information for the gain from the asset sale. Also, that the Form 6252 includes the correct profit %.

I appreciate your help.

sjrcpa

Level 15

Don't forget the 8594.

The more I know the more I don’t know.

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