Some interesting items in the November FTB Newsletter:

Real estate withholding law changes for 2007

Disclosure of list of corporations under audit – Whoops! So much for confidentiality.

Q:

Subject: Completing a Form 4797

 

Dear KMK:

 

Sold a business as a sole proprietor.  Asset allocation (Form 8594) goes as follows:  Class IV Assets:  $5500 (stock in trade) ; Class V Assets (Equipment)  $8400; Class VI/VII Assets (Goodwill and non-compete) $ 146,100.  Where do these numbers appear on Form 4797? ( and if they _all_ don’t appear, then the numbers on 4797 won’t “foot” to the total selling price.  Is this OK??)

 

Thanks

A:

If you check over the Q&A posts on my blog, you will see that I do not give people instructions on how to prepare their own tax return schedules, especially for something as complicated as the sale of a business. 

You should have been working with a professional tax advisor while your business was in operation and most definitely need to have one prepare the 1040 for the year of the business sale.  It is not as straight forward as you seem to believe.  Each component of the sales price needs to be reported in a special way, not all of them on the 4797. 

If you don’t already know of a good tax pro to work with, you should check out my tips on how to select the right tax preparer for you. 

Unfortunately, we don’t have anyone specific to whom we could refer you. I did recently post some names and links for some like-minded tax pros around the country. 

I wish I could be of more assistance; and I wish you the best of luck.  

Kerry Kerstetter

 

Ranches work as retreats for rich – It’s not just a great environment for the wealthy.  Having lived full time on rural properties for the past 17 years, I can’t imagine ever going back to living where the roads are paved and we can see any of our neighbors.