Question

Sold old business and bought new business

Forum|Forum|6 years ago
March 10, 2020
2 replies
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Nancy sold her nail shop business for $30,000 and bought a new nail shop business in another town for $35,000. How do I report these transactions?

TurboTax Home & Biz Windows

M

MinhT1

You account for the 2 transactions separately.

The sale of the old business is reported as a sale of business on form 4797.

To report the sale of the business, please read this TurboTax answer.

For the purchase of the new business, you have to set up a business in TurboTax, enter the assets (and the goodwill) as Depreciable assets. Please note that the purchase price of the business is not deductible.

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Carl11_2

Employee

This sounds like a test question that a first year tax law student would have, just to test their level of knowledge before actually starting that first year. Generally, folks don't ask their questions in the third person vernacular.

But each transaction is reported for exactly what it is. The sale of one business, then the physically separate purchase of a new business. The sale of one has no impact or relationship to the purchase of the other.

B

bartchfamilyAuthor

Thank you. I understand that, however in my version of Turbo Tax Business I can not figure out exactly where I enter this information. I do not do taxes for a living. I only take care of my personal business, the elderly and in this case a family who is trying to honestly pay their taxes. I know I have to account for the business they sold and the new business they bought but I do not know where in Turbo Tax to do this properly.

Appreciate the help

B

bartchfamilyAuthor

I found where to enter the "Sold Business" information - now I am just looking for where I enter the information on the purchase cost of the new business.

Thanks