Beg of Misc: Sale of Business

Question 1

rules for sale of busienss apply to: And not to…

Answer 1

i. Sole proprietorship, single member llc, business owned by corporation, business owned by pship. But not to sale of interest.

Question 2

a sole proprietorship:

Answer 2

isnt incorporated, icome reported on individual tax return via schedule C

Question 3

LLC’s are taxed differently

Answer 3

i. Single member LLC’s are taxed like sole proprietorships (schedule c on individual return) but liability os limited.

Question 4

when selling out- you can sell:

Answer 4

interet in the llc or the underlying assets

Question 5

multimmeber llc’s taxed as

Answer 5

pships

Question 6

corps must file

Answer 6

entity level return

Question 7

if you stell stock in the corp

Answer 7

these reules dont apply

Question 8

if corp sells underlying assets

Answer 8

rules apply.

Question 9

the rule is to:

Answer 9

apportion price to busines assets in sale.

Question 10

rules apply to… but not to…

Answer 10

buiness assets, interest

Question 11

only time selling interest counts for rule is

Answer 11

single member LLC

Question 12

when you sell business assets you cant treat

Answer 12

as single asset via 1060

Question 13

for assets on sale you must

Answer 13

a. Must allocate purchase price to each of the assets being sold via the FMV and determine gain or loss on each asset individually.

Question 14

the rule is compliacted because assets dont come with

Answer 14

price tags

Question 15

real wotld parties care about

Answer 15

aggregate price

Question 16

seller wants to allocate

Answer 16

allocate most to max capital gains (1231 property) and minimize ordinary income property (1245).

Question 17

buyer wants to

Answer 17

to allocate to max recovery of bbasis