Selling Your Business
- Selling Your Business
- Tax Aspects of Selling a Sole Proprietorship
- Types of Business Property
- Tax Forms Used When Selling a Business
- Reporting Sale of Business on Form 8594, Asset Acquisition Statement
- Section 1231
- Computing a Net Section 1231 Gain and Loss
- Section 197 Intangibles and Recapture Rules
More Tax Topics
- Business Structures
- Start-up Costs
- Depreciation
- Car Expenses
- Home Office Deduction
- Travel Expenses
- Hiring Workers
- Meals and Entertainment
- Retirement
- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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What is Not Section 1231 Property?
Real or depreciable property held one year or less:
If you sell real or depreciable business property held one year or less, the tax rules of Section 1231 do not apply.
Treat gains and losses on the sale or exchange of real or depreciable property used in a trade or business and held one year or less as ordinary gain or loss.
Inventory:
A sale, exchange, or involuntary conversion of property held mainly for sale to customers or used in the manufacture of products to be sold to customers, is not Section 1231 property.
Inventory held for use in the operations of a business, such as office and shipping supplies are not Section 1231 property.
Gain or loss on inventory included in the sale of your business is treated as ordinary gain or loss.
Copyrights:
The sale of a copyright, a literary, musical, or artistic composition, or similar property is not a Section 1231 property if:
- Your personal efforts created the property, or if
- You acquired the property in a way that entitled you to the basis of the previous owner whose personal efforts created it.
- For example, if you receive the property as a gift.
U.S. Government publications:
- U.S. Government publications that you received from the Government other than by purchase at the normal sales price, are not Section 1231 property.
Related Links
- Selling a Group of Assets
- When Does a Group of Assets Constitute a Trade or Business?
- Types of Business Property
- What is Section 1231?
- What is the Section 1231 Tax Advantage?
- What Are Section 1231 Transactions?
- How to Compute and Report a Net Section 1231 Gain or Loss
- Depreciation Recapture
- Nonrecaptured Net Section 1231 Losses
- Example of Section 1231 Computation
- About Form 8594 Asset Acquisition Statement
- Allocating the Sales Price of Form 8594
- How the Residual Method Works.
- What Are Section 197 Intangibles?
- Recapture of Amortization
- New Recapture Rules For Section 197 Intangibles After August 8, 2005
Copyright © 2008-2013 Larry Villano. All rights reserved.