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Using Form 8594 for the sell of Goodwill as deferred compensation

Level 1
Client List sold using form 8594, S-Corp shareholder wants to spread out the compensation. Can this be set up in Lacerte Software - where?
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2 Replies 2
Level 15

It's goodwill or deferred comp, or maybe some of each. They are not the same.

Installment sale reporting on Form 6252 is available in Lacerte. Use Dispositions Screen. Can be used for sale of goodwill. Not for deferred comp.

P.S. A client List is an other intangible asset. Neither goodwill nor deferred comp.

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Level 11

What does the actual contract of sale say? The Buyer cannot just choose what treatment he wishes.

Client list is an intangible, usually capital gain, usually long term. Buyer amortizes over 15 years. Seller reports gain over the life of the payments as installments.

If there is compensation, like a Consulting Agreement, that can be paid annually per the Sales agreement, and it could be an ordinary deduction to Buyer and Ordinary income to Seller. I said "could be" since it would have to be in a separate written agreement, separate from the Sale Agreement.

Absent a separate written agreement for consulting, it is a 15 amortization to the Buyer.

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