Data Entry

Watch the video Group Sale for a demonstration.

Go to the 4562 screen belonging to the first asset in the group. In the IF SOLD section enter:

• Property Type

• Date Sold

• Group Sale Number

• Group Sale Price

• Group Expense of Sale

• Fair market value for THIS asset (optional)

• Expense of sale for THIS asset (optional)

For the other assets sold in the group, on the 4562 screen enter:

• Property Type

• Date Sold

• Group Sale Number

• Fair market value for THIS asset (optional)

• Expense of sale for THIS asset (optional)

Group Sale Calculations

The sales price and sale expenses are allocated to each asset according to the proportion the asset's cost bears to the total cost of all the assets in the sale. The group sale information, including allocated amounts, expenses, and income, are shown on the Group Sale Summary in view mode.

Simple Example

Group sale price $400,000, and sale expenses of $10,000.

Asset	Cost	Percentage of total cost	Allocated price	Allocated sale expense	Line 21 (cost plus sale expense)
Rental house cost	$200,000	80%	$320k (80% of $400k)	$8k (80% of $10k)	$208k
Furniture cost	$40,000	16%	$64k (16% of $400k)	$1,600 (16% of $10k)	$41,600
Storage building	$10,000	4%	$16k (4% of $400k)	$400 (4% of $10k)	$10,400
All asset total	$250,000	100%	$400k	$10k	$260k

Less than 100% business use

If an asset has less than 100% business use, that results in a subsequent calculation affecting only that asset. For example, if the storage building is a 75% business use asset, a separate calculation for the storage building produces this result:

Line 20 allocated price	Line 21 (cost plus sale expense)
$12k (75% of $16k)	$7,800 (75% of $10,400)

Line 22 includes current and prior depreciation.

Goodwill on a Group Sale

IRS defines goodwill as the value of a trade or busi­ness based on expected continued customer patronage due to its name, reputation, or any other factor. For more information, see Publication 535.

First, enter the fair market value (FMV) of each asset that will be included in the group sale. This is entered in the override field Fair market value of THIS asset located on the 4562 screen.

Then create a 4562 or 4797 screen and enter the following:

• Description: Goodwill

• Date Acquired: Date the business started

• Cost/Basis: Leave blank

• Property Type: IA (Intangible Asset)

• Date Sold

• Group Sale Number

The software subtracts the total fair market value of all of the other assets in the group sale from the sales price. The remainder is carried to the zero cost asset on the Group Sale Summary.

Group Sale Installment Sale

See Drake Tax - Group Sale Installment Sale for detailed steps.