Sale of Schedule C Book of Business - Spidell

Sale of Schedule C Book of Business

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Message Board Sale of Schedule C Book of Business

  • This topic has 4 replies, 2 voices, and was last updated 1 week ago by Michael Clare.
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    • #317028
      Michael Clare
      Participant

      Client with Schedule C dies and sells Client List and all future income to be derived from those clients. Does spouse in California get step up to value of Client List at date of death?

       

       

    • #317046
      Mark Bole
      Participant

      If this intangible property is considered community property, then I suppose so. But was there any existing basis?  There could also be a step down in basis, depending.

      They should probably get a professional appraisal.  For a widow who is not a tax practitioner, selling a tax practice (client list) of their deceased spouse may not be an arm’s length transaction, so true FMV may not be known.

    • #317048
      Michael Clare
      Participant

      No basis and Sale took place to a true 3rd party in arm’s length transaction within weeks of death of husband so I think it would be a good estimate of fair market value at DOD.

      Thanks

       

    • #317052
      Mark Bole
      Participant

      My point was, as a non-tax-practitioner, the widow probably had no choice but to sell.  Her husband, if still alive, could have turned down a deal if he thought he was better off retaining the clients, but she does not have that option.  So maybe the FMV should be higher than what she sold it for.

      • #317073
        Michael Clare
        Participant

        Understood, thanks for replying

         

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