Form 8594

[ALANF]

I have a client who purchased a business in 2011. The sellers accountant sent form 8594 showing the contract sale. However, the seller did not tell his accountant that part of the sale included the purchaser to assume a liability for back rent the seller had not made. I feel that this should have been included on the 8594, however I am not sure what class of Asset this should be. I would greatly appreciate your input.

Thank You

AlanF

[Burke]

Form 8594 is for determining classes of assets. This is not an asset. It is a liability. I would think the sale price would have been reduced by this liability figure in the negotiations. Hence the total assets (and their allocation) would be less than it otherwise would be if this liability had not been taken into consideration. There would be no adjustment on the 8594, in my opinion and the (technically reduced) sale price should be allocated accordingly among the proper classes.

[ALANF]

Thank You for the fast response