Level 3

How do I determine the basis of intangible property sold on installment?

Forum|Forum|4 years ago
September 28, 2021
2 replies
18 views

my client sold his practice that included goodwill and patient records on installment agreement, these are both section 197 business intangibles. What do i use as the basis for installment sales form 6252

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IRonMaN

Level 15

Zero

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IRonMaN

Level 15

Or -1 if you use Lacerte🙂

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joshuabarksatlcs

Level 9

Before you jump right into zero, zilch, nada - or -1 for Lacerte - you may want to consider other factors:

Generally, did the owner acquire the intangibles in ways other than building them up?

Examples:

Intangibles purchased before a certain month of 1993? (Beginning year for Sec 197's 15-year amortization.)

Inherited goodwill? Surviving spouse of a business run by the couple?

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IRonMaN

Level 15

But if ain’t on the balance sheet, it is zero, zilch, nada, -1.

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joshuabarksatlcs

Level 9

In most cases, true. Yet:

1. Arguably, under certain facts and circumstances, one might find it revivable say with Form 3115.

2. Many Sch C clients don't show up with a balance sheet.

My point was just that zero, zilch nada -1 etc. ain't the only answer.

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