Insurance agency is purchased a year ago. The seller has cancer and dies about 5 months after my client purchases it. My client was approached by the husband who knew my client had overpaid for the practice. The owner had been a good friend of my client for years and he did not want to argue with her. $75,000 was assigned to equipment and $400,000 to intangilbes. Cash up front was $100,000. Of course I 179'd the equipment in the purchase year. Here is the problem my client now has the husband saying he appreciated how he handled the sale and knew he has overpaid for it. They are re-evaluating the sale and looks like he will end up getting as much as a $100,000 discount off the original purchase price. The customer active list was completely wrong, but no one was going to argue with an owner/friend who was given 6 months to live.
My puzzle-when the reduction is decided upon can I just reduce the 197 asset??? Is there an election to do that? There was an extensive list attached to the agreement concerning the $75,000...
My puzzle-when the reduction is decided upon can I just reduce the 197 asset??? Is there an election to do that? There was an extensive list attached to the agreement concerning the $75,000...
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