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Donut Shop

Level 1

I have a customer who sold her donut shop back in October, Where on the 1040 and what schedule would I report the amount she received for the sale between buyer and seller only, no escrow involved. I noticed there is line 5 and line 6 on Schedule C, but im not sure if I should report this income received for the sale of the business in this lines. The business was opened in 2016 and sold in 2019. Thanks

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3 Replies 3
Level 15

Kinda depends on exactly what was sold.  Form 4797 would be a good starting point though.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Level 11
Level 11

Did your client just sell inventory (did the local police buy it 😁) or did they sell business, goodwill, building? Like Ironman said, depends what was sold.