A sale of personal goodwill, if respected by the IRS, creates long-term capital gain to the shareholder, taxable at up to 23.8% (maximum capital gain rate of 20%, plus the 3.8% net investment income tax) rather than ordinary income to the target corporation, taxable at up to 35% plus an additional tax of up to 23.8% on …

Do you report sale of inventory on 4797?

If you sell or dispose of property used in a trade or business, it must be reported on IRS Form 4797, Sales of Business Property.

Where is input screen for S Corp K-1 for sale of goodwill N?

12-07-2019 07:46 AM Business was held in an S Corp and was not passive and the business was sold. Final S Corp K-1 was issued showing Goodwill as a capital gain on the sale. Where is the input screen to indicate the Goodwill on sale of S Corp was not subject to net investment income tax? Solved! Go to Solution. 12-07-2019 07:46 AM

When to use Form 4797 vs 8949 or Schedule D?

Investment properties that you sell are reported on form 8949, but assets that are used in business are reported on form 4797. For instance – if you sell a rental property – the sale is reported on form 4797, but if you sell a land that was held for investment only and not for production income -the sale is reported on form 8949.

Is the sale of goodwill a capital gain?

Final S Corp K-1 was issued showing Goodwill as a capital gain on the sale. Where is the input screen to indicate the Goodwill on sale of S Corp was not subject to net investment income tax? Solved! Go to Solution. 12-07-2019 07:46 AM Disposition of property not subject to net investment income tax included in capital gains and losses.

How is the gain reported on Form 4797?

Generally, the gain is reported on Form 8949 and Schedule D. However, part of the gain on the sale or exchange of the depreciable property may have to be recaptured as ordinary income on Form 4797. Use Part III of Form 4797 to figure the amount of ordinary income recapture.