Allocation of the Purchase Price - Asset Sales
The allocation of the purchase price of a business has significant tax ramifications for both the buyer and seller of businesses structured as asset sales. Consequently, both buyers and sellers of businesses should consult with a CPA before agreeing to an asset allocation formula. This is very important.
While your CPA or Cost Segregation Consultant, will establish a more detailed list of assets and depreciation schedules, the primary list of assets in a business asset sale, includes: (1) Equipment, (2) Furniture, (3) Fixtures, (4) Leasehold improvements, (5) Goodwill, (6) Covenant Not to Complete, (7 Inventory, and (8) Transferable licenses.