Article Date:
August 2018


Word Count:
556

 

 

Q&A: Did Goodwill Take a Hit under Tax Reform?


Question

 

There is a provision in the Tax Cuts and Jobs Act (TCJA) that amends Code Section 1221(a)(3) such that gains and losses from the sale of a patent, invention, model or design, or secret formula or process are ordinary income and not capital gain.

 

These are “self-created property,” which can apply to goodwill as well. I have heard some comments that there is a possibility that the sale of goodwill could now be ordinary income. If so, this change could create a large tax hit for S and C corporation owners selling the assets of the corporation versus selling the stock.

 

Did the TCJA change the taxation of goodwill? ... Log in to view full article.

Log in to view full article
Already a subscriber?
 
Email Address

 
Password

Log In Send me my password

You'll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter

Not yet a subscriber?
 
with a money-back guarantee