Instructions for Form 8594

If you own any business in the United States, then you must file Form 8594 with the IRS to receive a copy of your taxes. This form is required to list the fair market value of your business assets. Keep reading our post for more information on Form 8594.

Form 8594 is what you must file with your annual income tax return for the year of the sale. This form is used to report transactions involving goodwill or going-concern value. Goodwill, or going-concern value, refers to a buyer’s value in the assets. To use Form 8594, the buyer and seller must both report the price paid for each asset.

What is Form 8594?

Form 8594 is a form that must be filed when selling assets of a business. The form must be filed by the seller and the purchaser, describing the transfer of ownership. It also lists the total sale price, allocating it to seven classes of assets. The total sale price is the “fair market value,” the value a business can reasonably sell its assets for in the public market.

It’s important to remember that the time it takes to fill out and file this tax form will depend on the taxpayer’s situation. If you have any questions about the form, you should contact the IRS. They can be contacted at the address listed in the tax return instructions.

Instructions for Form 8594
Instructions for Form 8594 1

How to File Form 8594?

In most cases, you will need to file the form for each type of asset you own. For example, you must report the asset’s fair market value if you own a property. This is the asset’s value before any mortgages, liens, or other types of liabilities. The fair market value of a property is the value it would sell for if it were offered to the public for a price similar to the fair market value.

A business has different types of assets, each with varying taxation rules. This means that the sale of a business can have different tax consequences for the buyer and seller. Fortunately, the Internal Revenue Service issues Form 8594 to help you calculate the basis of your assets.

How to Fill Out Form 8594?

Completing Form 8594 is a necessary part of the process when it comes to filing your income tax returns. This form must be filled out by both the buyer and seller. When filling out the form, assess whether the sale is a business or a trade transaction. In addition, make sure to include the form number and tax year. The following are the sections you need to fill out on your Form 8594:


  • Line 1: Name, address, and a TIN of the other party of the transaction
  • Line 2: Fill out the date when the asset’s sale occurred.
  • Line 3: Enter the total value of the assets exchanged.


  • Line 4: Enter the total fair market value of all assets in a given asset class
  • Line 6: This line must be filled out by both the purchaser and the seller. To determine the max consideration to be paid, assuming that any contingencies specified in the agreement are met and that the consideration paid is the highest amount possible.


  • A new Form 8594, together with Part 3 of the form, must be filled out for each year for an increase or decrease in consideration. Reasons for the increase or decrease in allocation must be given in the form.

Are you having trouble with Form 8594? The Internal Revenue Service (IRS) publishes print versions of their forms. You can get the printed version of Form 8594 and the instructions for Form 8594 on our website. 

Who Must File Form 8594?

Form 8594, known as the Asset Acquisition Statement, is a mandatory filing for both buyers and sellers involved in the purchase or sale of a business. It’s required when the sale includes a group of assets that make up a business or a substantial part of a business. This form helps the IRS determine how to treat these assets for tax purposes.

When Must Form 8594 Be Filed?

This form should be filed with the taxpayer’s income tax return for the year in which the sale occurred. If the sale happens in 2024, the form should be filed with the 2024 tax return. It’s crucial to file this form timely to avoid any potential penalties or complications with the IRS.

Submitting Form 8594

  • Where to Send Form 8594: The completed Form 8594 should be attached to the taxpayer’s income tax return. Therefore, it should be sent to the same IRS address where the tax return is filed.
  • How to Send Form 8594: Since Form 8594 is an attachment to your income tax return, it should be sent through the same method you use for your tax return, whether that’s electronically or through the mail.

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