Use Form 8594. Read the instructions to the form to address any uncertainty. You may also...

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Use Form 8594. Read the instructions to the form to address any uncertainty. You may also read Section 1060. The purpose of this section is to prescribe an approach to allocate a lump sum purchase or sales price among various assets purchased or sold. Form 8594 is a reporting device that is filed by both the buyer and the seller. The way the allocation is done is spelled out in the regulations to Section 338 (the two sections share use of the "residual" method of allocation). YOU MUST COMPLETE THE ACTUAL FORM 8594. THIS MEANS YOU SUBMIT THE IRS FORM AND NOT SOME SELF-CREATED EQUIVALENT DOCUMENT. FACTS Target Corporation's assets are acquired by Acquiring Corporation in exchange for $4,400,000 of cash to be paid to Target Corporation. The purchase agreement is dated November 24, 2020. Target Corporation's EIN is 23-372698674. Target Corporation's address is 3245 Industrial Blvd., McKinney, TX 75070. YOU REPRESENT TARGET (THE SELLER) AND WILL REPORT THE FORM ON BEHALF OF THE SELLER. Acquiring Corporation's EIN is 23-900653890. Acquiring Corporation's address is 9200 Bretton Lakes Rd., Nashville, TN, 37209. The contract lists the following assets and values assigned by the parties. The parties have agreed that they will follow the purchase price allocation as stated in the contract. Asset Cash Inventory Accounts Receivable Workforce in Place Customer Lists Equipment Furnishings Land Building Assigned FMV 25,000 700,000 100,000 400,000 275,000 500,000 80,000 120,000 800,000 In addition to the $4,400,000 paid to Target Corporation, Acquiring has also agreed to pay $1,000,000 of goodwill to Jack Sparrow, the President of Target. The agreement between the parties specifies that this is for Sparrow's personal goodwill. Use Form 8594. Read the instructions to the form to address any uncertainty. You may also read Section 1060. The purpose of this section is to prescribe an approach to allocate a lump sum purchase or sales price among various assets purchased or sold. Form 8594 is a reporting device that is filed by both the buyer and the seller. The way the allocation is done is spelled out in the regulations to Section 338 (the two sections share use of the "residual" method of allocation). YOU MUST COMPLETE THE ACTUAL FORM 8594. THIS MEANS YOU SUBMIT THE IRS FORM AND NOT SOME SELF-CREATED EQUIVALENT DOCUMENT. FACTS Target Corporation's assets are acquired by Acquiring Corporation in exchange for $4,400,000 of cash to be paid to Target Corporation. The purchase agreement is dated November 24, 2020. Target Corporation's EIN is 23-372698674. Target Corporation's address is 3245 Industrial Blvd., McKinney, TX 75070. YOU REPRESENT TARGET (THE SELLER) AND WILL REPORT THE FORM ON BEHALF OF THE SELLER. Acquiring Corporation's EIN is 23-900653890. Acquiring Corporation's address is 9200 Bretton Lakes Rd., Nashville, TN, 37209. The contract lists the following assets and values assigned by the parties. The parties have agreed that they will follow the purchase price allocation as stated in the contract. Asset Cash Inventory Accounts Receivable Workforce in Place Customer Lists Equipment Furnishings Land Building Assigned FMV 25,000 700,000 100,000 400,000 275,000 500,000 80,000 120,000 800,000 In addition to the $4,400,000 paid to Target Corporation, Acquiring has also agreed to pay $1,000,000 of goodwill to Jack Sparrow, the President of Target. The agreement between the parties specifies that this is for Sparrow's personal goodwill.

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Here is a completed Form 8594 for the asset sale described in the question Form 8594 Rev September 2... View the full answer