Form 8594
Form 8594 is the IRS Asset Acquisition Statement that buyer and seller each file when a group of assets constituting a trade or business is transferred and goodwill or going-concern value attaches. It reports how the purchase price was allocated among asset classes.
Why Form 8594 Matters in a Laundromat Sale
Allocation determines the buyer's depreciable basis and the seller's character of gain, including any depreciation recapture on equipment. Because the two sides have opposing incentives, allocation is negotiated in the purchase agreement and then reported consistently by both parties. Inconsistent filings invite examination of both returns. This is CPA territory, and the conversation belongs before the LOI is signed rather than at closing.
Example
A $400,000 purchase allocates $210,000 to equipment, $25,000 to a non-compete, $15,000 to leasehold improvements, and $150,000 to goodwill. The buyer prefers more to equipment for faster cost recovery; the seller prefers more to goodwill for capital-gain treatment. Both file Form 8594 with the agreed figures.
What to Check
- Agree the allocation in the purchase agreement, not at the closing table.
- Have both CPAs confirm they will file consistently.
- Understand what the allocation does to your depreciation recapture or your depreciable basis.
Where This Comes Up
- Form 8594 and Laundromat Purchase Price Allocation
- Purchase Price Allocation in a Laundromat Sale: Where the Money Gets Assigned
- Section 1060
- Laundromat Valuation: How Stores Are Priced and Why
Related Terms
- Section 1060 — Section 1060 is the Internal Revenue Code provision governing how a purchase price is allocated in an applicable asset acquisition
- Goodwill — Goodwill is the value of a business beyond the fair market value of its identifiable assets: the customer base
- Bonus Depreciation — Bonus depreciation is an additional first-year deduction allowing immediate expensing of eligible property rather than recovery over its normal life
- Asset Sale — An asset sale is a transaction in which the buyer purchases specified business assets — equipment
See the full laundromat glossary for all 78 terms.
The Next Step
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.