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How is the purchase of a business accounted for?

Mike12321
Level 4

Client purchased a soda vending machine business for $10,000. How is this accounted for on the tax return? Is is just not recognized until the business is sold at some point in the future?

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Jim-from-Ohio
Level 12
Level 12

Amortizable over 15 years

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4 Comments 4
Accountant-Man
Level 13

What was purchased, customer list, workforce, machines, inventory?

What does your paid, professional accountant say?

** I'm still a champion... of the world! Even without The Lounge.
Mike12321
Level 4

I believe it is just the territory. The soda companies own the machines.

He had to restock the when he purchased the business.

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Jim-from-Ohio
Level 12
Level 12

Amortizable over 15 years

George4Tacks
Level 15

One more thing for buyer and seller to do. https://www.irs.gov/forms-pubs/about-form-8594

 


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