[Anonymous]

Original basis: 500,000
Accumulated amortization: 400,000
Selling price(as stated on escrow statement): 1,500,000

how should these info. be reported on an S corp tax return?
should the gain be on 4797 or schedule D?
is there a recapture of the 400,000?
how to get rid of the remaining 100,000 adjusted basis of the goodwill on 4562?

Thanks in advance.

[murano]

answer to question #2
Taxpayers may be able to avoid the ordinary income recapture on certain intangible assets. In PLR 201016053, the Internal Revenue Service allowed the taxpayer to bifurcate its customer-based intangibles between acquired customer-based intangibles (a §197 asset) and self-created intangibles (a non-§197 asset). By allowing the taxpayer to bifurcate the customer-based intangible assets, the taxpayer only had to recapture the amortization on the acquired customer-based intangibles. The self-created intangibles were not subject to the ordinary income rates.
man this is too complex I think it's beyond the scope of the exam

[Author]

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