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  • Form 8594

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This form is referenced in an endnote at the Bradford Tax Institute. CLICK HERE to go to the home page. Form 8594 Asset Acquisition Statement OMB No. 15451021 Under Section 1060 (Rev. December 2012).

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Instructions for Form 8594 The form must be filed when a group of assets were transferred (in a trade or business), and if the buyer's basis in such assets is determined by the amount paid for the assets. This applies when the group of assets make up a trade, or business in the hands of the seller, the buyer, or both.

Form 8594 is used to report the sale and purchase of a group of assets that constitute a business. Both the purchaser and seller must file Form 8594 with their own individual income tax return. On Form 8594, the total selling price of the business is allocated to asset classes using the residual method.

How to Perform Purchase Price Allocation (Step-by-Step) Step 1 → Assign the Fair Value of Identifiable Tangible and Intangible Assets Purchased. Step 2 → Allocate the Remaining Difference Between the Purchase Price and the Collective Fair Values of the Acquired Assets and Liabilities into Goodwill.

The purpose of the PPA is to help you identify all the assets that were acquired, tangible and intangible, and the liabilities that were assumed, and recognize them at fair value.

Subsequently, the financial reporting standards (RJ and IFRS) require that the purchase price paid (in a business combination) needs to be allocated to the assets acquired and liabilities assumed, a process that is also referred to as a 'purchase price allocation' or PPA.

IRS Form 8594 requires that both parties allocate the purchase price among the various assets of the business being purchased so the seller can calculate the taxes due upon the sale, and the buyer can calculate the new basis in the assets.

Who is Responsible for Purchase Price Allocation? The Internal Revenue Code requires that both buyers and sellers submit a purchase price allocation on form 8594. A common misconception is that buyers and sellers must submit consistent purchase price allocations.

Purpose of Form Both the seller and purchaser of a group of assets that makes up a trade or business must use Form 8594 to report such a sale if goodwill or going concern value attaches, or could attach, to such assets and if the purchaser's basis in the assets is determined only by the amount paid for the assets.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232