sale of goodwill

[MagPM]

My client sold his relationship with his clients to a company. This is goodwill created over several years. I want to sell it on Schedule D as a capital asset but since it is self created I don't know what the acquired date should be or should I just check the box for short term or long term?

[Nashville]

Magnum P I

Were there any assets in the sale? Such as cash, receivables, depreciable equipment, etc? Are you aware of the 8894 requirements?

Where I am headed is that (in general) not ALL of this sale is a capital gain...

[dsi]

My client sold his relationship with his clients to a company. This is goodwill created over several years. I want to sell it on Schedule D as a capital asset but since it is self created I don't know what the acquired date should be or should I just check the box for short term or long term?

When you say "sold his relationship", are you saying he sold his client list? his client base?

[BHoffman]

My client sold his relationship with his clients to a company. This is goodwill created over several years. I want to sell it on Schedule D as a capital asset but since it is self created I don't know what the acquired date should be or should I just check the box for short term or long term?

If your client merely sold his customer list, then it is recorded as a long term capital gain. If he also received payment for a covenant not to compete, then he has ordinary income.

If he was operating as a corporation, then we need to talk some more