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    Client bought Insu agency (asset purchased) in Aug 2005.

    Startup expense - 2500
    No need to amortise
    Need election to expense

    Paid $125,000
    $2000 equipment - sec 179
    $ 123,000 for customers - Treat as goodwill and amortize

    Does it sound right?

    Thanks

    #2
    Sounds right to me!
    Dave, EA

    Comment


      #3
      Customers List

      Is the seller treating it the same way? Same dollar amounts?
      The form detailing the sale is supposed to be attached to bhe tax returns of the seller & buyer.

      Comment


        #4
        Originally posted by Bird Legs
        Is the seller treating it the same way? Same dollar amounts?
        The form detailing the sale is supposed to be attached to bhe tax returns of the seller & buyer.
        Thanks

        Do have exhibit "A"

        There is no form though!

        Comment


          #5
          Selling/Buying Business

          Form 8594 - Asset Acquisition Statement Under Section 1060.
          Also, it was not mentioned, but I will ask anyway. Was there a NonCompete
          Agreement?
          If so, there may have to be an allocation to that.

          Comment


            #6
            Originally posted by Bird Legs
            Form 8594 - Asset Acquisition Statement Under Section 1060.
            Also, it was not mentioned, but I will ask anyway. Was there a NonCompete
            Agreement?
            If so, there may have to be an allocation to that.
            There was no noncompete agreement to my knowledge but I iwll check it out. What kind of allocation? Are you talking about 6 or 7 different allocations required under section 1060?

            Thanks

            Comment


              #7
              Covenent in Purchase

              A covenent as part of a purchase of a business is 15 years anyway....

              Comment


                #8
                Originally posted by Bird Legs
                Form 8594 - Asset Acquisition Statement Under Section 1060.
                Also, it was not mentioned, but I will ask anyway. Was there a NonCompete
                Agreement?
                If so, there may have to be an allocation to that.
                I am completing 8594

                Class I = Cash Paid - $3500
                Class II =
                Class V = Goodwill - 120000
                Class VI = Equipment - 5000

                Total 128500

                I will put same amount in both column, under Part II Assets

                Does it sound right?

                Thanks

                Comment

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