where to put info regarding selling the business

There are two steps to selling a business.  Form 8594 must be completed and filed with both the seller and the buyer tax returns.

This form is not supported in TurboTax Online or TurboTax Desktop.  This form should be completed and filed with your tax return, and an exact duplicate filed with your buyers tax return. This means you should mail your return.

Most importantly is that both the buyer and seller must have the exact same information on Form 8594.  Use the link to print the form and complete it.  A second option would be e-file your tax return and then file an amended return attaching only that form.

Who must file Form 8594?

Both the seller and purchaser of a group of assets that makes up a trade or business must use Form 8594 to report such a sale if:

• goodwill or going concern value attaches, or could attach, to such assets and
• the purchaser's basis in the assets is determined only by the amount paid for the assets.

When To File

Generally, attach Form 8594 to your income tax return for the year in which the sale date occurred.

If the amount allocated to any asset is increased or decreased after the year in which the sale occurs, the seller and/or purchaser (whoever is affected) must complete Parts I and III of Form 8594 and attach the form to the income tax return for the year in which the increase or decrease is taken into account.

Once you have the sales price of your business (goodwill, assets, etc). It is reported as a Sale of Business Property.

1. Income and Expenses at the top
2. Scroll down to Other Business Situations
   • For TurboTax Desktop: Business Income and Expenses > Less Common Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter your sales information:
   1. Description of the Property (Machine Type)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Cost
   5. Depreciation

If you have assets in the business section of your tax return you must go through each asset and report the sale. Calculate the selling price of each asset by using the cost of each and dividing it by the total of all. Then use that times the selling price for each asset (and selling expenses). Any depreciation used must be recaptured up to the amount of gain. 

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