My client bought a business and had an immediate offer from someone who wants to buy it from my client at $ 300000 more than he paid.
My client has stocks on which he would lose $ 200,000 as a long-term capital loss if he sold them.
If the gains and losses were offset as capital losses he would have a net $ 100000 short term gain taxable at ordinary income.
My question is: would the sale of the business qualify as a capital gain or would it be a sale of business property reportable on Form 4797?
If it were reported on Form 4797 it looks he would have a $300000 taxable gain with only a $ 3000 capital loss on the stock. Is this right?
Since he only bought and sold the business and never operated it, would it be proper to call it 'non-business' investment property and classify it as a capital gain rather than a gain to be reported on Form 4797?
My client has stocks on which he would lose $ 200,000 as a long-term capital loss if he sold them.
If the gains and losses were offset as capital losses he would have a net $ 100000 short term gain taxable at ordinary income.
My question is: would the sale of the business qualify as a capital gain or would it be a sale of business property reportable on Form 4797?
If it were reported on Form 4797 it looks he would have a $300000 taxable gain with only a $ 3000 capital loss on the stock. Is this right?
Since he only bought and sold the business and never operated it, would it be proper to call it 'non-business' investment property and classify it as a capital gain rather than a gain to be reported on Form 4797?
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