Partial Sale of S Corp

Forum|Forum|1 year ago
December 5, 2024
4 replies
14 views

I have a client that received an offer of 2 million to sell part of the business. It would include some assets, $50,000. The rest is not really "goodwill" the buyer will use their own name. It isn't a sale of goods, where does the rest go?

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IRonMaN

Level 15

"The rest is not really "goodwill""

If it isn't really goodwill, what does the purchase agreement say it is going to be?

Slava Ukraini!

BobKamman

Level 15

Sounds like covenant not to compete, but really not enough information here to make an educated guess.

IRonMaN

Level 15

My uneducated guess is going to go with goodwill.

Slava Ukraini!

George4Tacks

Level 15

Who is selling? The individual or the S-Corp? What is the wording of the offer? We want to buy this wonderful selection of equipment and .......?????

Answers are easy. Questions are hard!

D

DDSmithAuthor

Level 3

If it was goodwill, that goes on Schedule D, since the corporation is NOT being sold, would the deposit go against an other income account on the P&L? And the taxes be paid on the K1? I am trying to figure the JE.

The lawyer is reviewing the contract, I have not seen it, but it says the corporate name is the seller.