USA Recognition of business asset purchase and related obligation


Joined
Jan 18, 2012
Messages
8
Reaction score
2
I have a business tax question. What is the tax effect on derecognition of a business purchase that was purchase in year 1 with a seller finance obligation, amortized/depreciated in year 1, 2, and 3 by the buyer but because of a buyer/seller dispute the buyer refused to pay the seller and at that time simply removed the obligation and asset that was amortized/depreciated for tax purposes in prior years? The buyer still operate the business and building. Should the accumulated amortization and depreciation be written off to the P&L and considered as a recaptured capital gain? Does it have a tax effect? The business did not receive a debt forgiven? How should this transaction be handle for book accounting and tax purposes?
 
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
1,652
Reaction score
222
Country
United States
What was purchased? Was it business equipment?
 
Joined
Jan 18, 2012
Messages
8
Reaction score
2
The purchase cost were split between client list, goodwill, office furniture/equipment and building.
 
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
1,652
Reaction score
222
Country
United States
Here you do not have an accounting event until you have a legal event. Like getting seller to agree to unwind sale or repossessing the assets. So you need to consult an atty.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top