Fillable Form IRS 8594

What is IRS-8594?

IRS Form 8594, Asset Acquisition Statement Under Section 1060, is a critical document used in order to report particular details about asset acquisitions for federal income tax purposes. This form serves to report the purchase of a group of such assets that make up a trade or business, ensuring that both the buyer and the seller agree on the allocation of the purchase price to the various assets involved.

This allocation is essential not just for savings and checking accounts, but also for tax purposes, as it determines the depreciation and amortization deductions for the buyer and the amount of gain or loss for the seller.

Correct classification of assets in IRS Form 8594 is crucial, particularly when dealing with assets commonly found in various financial institutions, such as savings and loan associations. The form imposes specific rules to follow, which often results in complex and detailed calculations. It is important for both parties to accurately complete this form to properly declare information about actual asset acquisitions as needed by the IRS internal revenue code, as any discrepancies may result in tax or legal consequences.

How do I fill out IRS-8594?

A fillable copy of IRS-8594 can be found here. Attach this form to your income tax return, and submit them together.

Name Shown on Return

Enter the name shown on your return.

Identifying Number Shown on Return

Enter the ID number shown on your return.

Identification

Mark a box to indicate whether you are a purchaser or a seller.

Part I - General Information

Name

Enter the name of the other party to the transaction.

Other Party’s Identifying Number

Enter the other party’s ID number.

Address

Enter the following address information for the other party:

• Number
• Street
• Room or Suite Number
• City or Town
• State
• ZIP Code

Date of Sale

Enter the date that the sale was made.

Total Sales Price

Enter the total sales price.

Part II - Original Statement of Assets Transferred

For each of the assets, enter the aggregate fair market value and the allocation of the sales price. Then, in the last row, enter the total of all values in each column.

Questions

Mark “Yes” or “No” to answer the following questions:

• Did the purchaser and seller provide for an allocation of the sales price in the sales contract or in another written document signed by both parties?
  • If “Yes”, are the aggregate values listed for each of asset Classes I, II, III, IV, V, VI, and VII the amounts agreed upon in your sales contract or in a separate written document?
• In the purchase of the group of assets (or stock), did the purchaser also purchase a license or a covenant not to compete, or enter into a lease agreement, employment contract, management contract, or similar arrangement with the seller (or managers, directors, owners, or employees of the seller)?
  • If “Yes,” attach a statement that specifies (a) the type of agreement and (b) the maximum amount of consideration (not including interest) paid or to be paid under the agreement.

Part III - Supplemental Statement

Tax Year and Tax Return Form Number

Enter the tax year and tax return form number with which the original Form 8594 and any supplemental statements were filed.

Asset Information

For each asset class, enter the following details in the columns provided:

• Allocation of sales price as previously reported
• Increase (or decrease)
• Redetermined allocation of sales price

Then enter the total of the allocation of sales price as previously reported, and the total of the redetermined allocation of sales price in the space provided.

Reason(s) for Increase or Decrease

Enter an explanation of the increase or decrease. If more space is needed, attach an appropriately labeled sheet of paper.

Frequently Asked Questions (FAQs)

When should IRS Form 8594 be filed?

The form should be filed in the tax year the sale occurs. This ensures timely and accurate reporting of the transaction for tax purposes.

What are Class I assets?

Class I assets include cash and general deposit accounts held in banks or other financial institutions. These assets are considered the most liquid.

What are Class II assets?

Class II assets are actively traded personal property, such as certificates of deposit and government securities. These assets are highly marketable and easily convertible to cash.

What are Class III assets?

Class III assets consist of accounts receivable and debt instruments. These represent money owed to the business that is being sold.

What are Class IV assets?

Class IV assets include stock in trade and inventory of the business. These are goods held for sale in the ordinary course of business.

What are Class V assets?

Class V assets encompass all other assets that do not fall into the other classes, such as furniture, fixtures, and equipment. These are generally tangible personal property used in the business.

What are Class VI assets?

Class VI assets are section 197 intangibles except for goodwill and going concern value. These can include patents, copyrights, and trademarks.

What are Class VII assets?

Class VII assets consist of goodwill and going concern value. These represent the value of the business beyond its identifiable tangible and intangible assets.

What happens if the buyer and seller later agree to change the purchase price allocation?

They must file an amended IRS Form 8594 to reflect the changes. This ensures that both parties' tax records are updated accurately.

What if only part of a business is sold?

IRS Form 8594 must still be filed if the part sold constitutes a trade or business. The allocation of purchase price among the sold assets is required.