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February 4, 2020
Question

Sale of Business, how to handle income monthly payments for 2019, I have TT business?

  • February 4, 2020
  • 1 reply
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I'm using TurboTax Business, making a final tax return for my S corp and need information on how to enter the income received from the buyer each month of 2019 and any other forms required (the program instructions are confusing?

1 reply

DavidS127
February 4, 2020

It depends on whether you are (a) selling the S Corp itself, or (b) the S Corp is selling its assets to the buyer.

 

If you are selling the S Corp (buyer is buying all your shares/member interest) the transactions don't belong on your Form 1120S.  Instead, you report the sale on your personal tax return as the sale of a business.  The payments from the buyer make up the "sales price" for the business and your "basis" in the S Corp is deducted from that to get to the gain or loss on the sale.  The Form 1120S for the business for the year you sell just reports the business income and expenses up to the point of sale.

 

If the buyer is buying the assets of the business but not the business itself, the payments from the buyer make up the sales price for the various assets being sold, and you report it in the "Dispose of Business Property" section of TurboTax Business.

 

 

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