Discussion:Insurance business sale - with a twist
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Discussion Forum Index --> Advanced Tax Questions --> Insurance business sale - with a twist
Discussion Forum Index --> Tax Questions --> Insurance business sale - with a twist
| 10 October 2009 | |
| I have a client who bought a book of business from their partner. This is an independent insurance company. He paid $250k for it, let's say. He was promised by the previoius owners that if any of the old business left, he would get a portion of the $250 back from them. They never paid him, but over 80k did not stay. Questions - am I safe treating this as a setion 197 asset for 250k, and amortizing over 15 years? The money he is out by the business not staying - is that an impairment to the asset? How is that treated? | |
Southparkcpa (talk|edits) said: | 10 October 2009 |
| DCN,
He paid the 250K so that is your intangible unless some was allocated to fixed assets and an 8594 was filed. IF he received money back from the seller you could treat that as a reduction of the asset but you didn't. There is code section on this but that I believe is not relevant. The 80K is really nothing as I see it. Simply an amount that is used to figure out how much he over paid by.
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| 10 October 2009 | |
| That's what I thought. Just wanted to make sure there was no impairment. He simply overpaid. | |
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