IRS Form 8594 Asset Acquisition Statement Under Section 1060

IRS Form 8594 Asset Acquisition Statement Under Section 1060

What Is IRS Form 8594?

IRS Form 8594, Asset Acquisition Statement Under Section 1060 , is a fiscal instrument designed for taxpayers that carried out a sale of assets used for a business or trade.

Alternate Name:

  • Tax Form 8594.

You have to notify tax authorities about the specifics of the transaction if the transfer of assets means the purchaser has obtained valuable assets as well as prospective competitive advantage, the value of those assets implies the business will continue its profitable operations, or the buyer's basis in the transferred property is defined strictly by the price they paid.

This document was issued by the Internal Revenue Service (IRS) on November 1, 2021 , rendering older editions of the form obsolete. You can download an IRS Form 8594 fillable version through the link below.

What Is Form 8594 Used For?

Complete and submit the 8594 Tax Form if you participated in a sale of a group of assets that make up a business or trade whether you were the seller or buyer. The assets in question constitute a business or trade before or after the deal is formalized whether you are transferring land, furniture, business records, designs, patterns, formulas, or licenses you obtained from government agencies.

Both parties are obliged to inform the IRS about the details of the transaction - formal instructions for Form 8594 demand taxpayers to attach a copy of the form to the tax return that outlines the tax year when the sale took place. If you fail to comply with the filing requirement for this document on time and you are unable to clarify why that happened, you will be subject to a penalty.


Form 8594 Instructions

The IRS Form 8594 Instructions are as follows:

  1. State your full name and taxpayer identification number - note that the name you indicate must match the one you include on your annual income statement. Check the box to confirm whether you are filing the statement as a seller or purchaser.

  2. Provide information about the other party to the acquisition - record their name, taxpayer identification number, and mailing address. Add the date of the transaction and the sales price one of the parties paid.

  3. List the market value of every asset and specify how the sales price was allocated . Note that assets are divided into seven categories that are called classes - it is important to separate different types of assets whether you are describing deposit accounts, stock, buildings, vehicles, equipment, or intangibles such as trademarks and operating systems.

  4. Answer questions to elaborate on the nature of the transaction . Tax authorities need to know whether the parties clarified how the sales price will be allocated in the text of the main agreement they signed or somewhere else. It is also necessary to confirm how the seller and the purchaser came to an agreement regarding the market value of every asset identified in the form.

  5. In case the buyer also signed a separate contract with the seller to outline the terms of a lease, management, non-compete clause, or license, you need to check the appropriate box . If some kind of agreement mentioned in the form exists, you have to enclose a separate statement that elaborates on the type of agreement and the amount of money that will be paid in accordance with the arrangement of the parties.

  6. Fill out the third part of the form if you are filing an amended version of the document because you have discovered the need to lower or increase the amount of consideration . You have to specify the tax year when you filed the previous statement and the number of the tax form you submitted with it.

  7. Go through all seven classes of assets you have described before and indicate how the sales price is allocated now . Use the comments section to provide explanations - you are permitted to enclose more sheets of paper if the space in the instrument is not enough to list all the reasons behind the amendment.

Other Revision

Download IRS Form 8594 Asset Acquisition Statement Under Section 1060

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