Report the sale of my business

[morlangfamily]

I sold my sole proprietorship in 2021 and need to report the proceeds of the sale. However, I understand it's not taxed as regular business income. How do I go about this?

[TurboTaxSusan]

If your business was not incorporated, then you aren't really selling the business, you are selling the assets. This means that you would enter any fixed asset as a disposition in the CCA section and check off “No assets left in class” to show that there is nothing else left in the class pools. You would also report zero for your end inventory, if applicable.

If you received more money than your tangible assets were worth, this is called “goodwill”. You would also enter this in the CCA section as an addition to Class 14.1 (5%). Since you likely don’t already have a value for the goodwill of your company, you can enter the cost as $1. 

Then you can enter in goodwill again, this time as a disposition to Class 14.1. For the disposition you would enter the amount that you were paid for your business that was more than your tangible assets were worth. Again, check off “No assets left in class” to show that there is nothing else left in Class 14.1.

[morlangfamily]

Ok, so i'm still a little confused lol.

So here are some numbers if you'd be willing to direct me a little further?

We sold our meal delivery business for $30,000

Assets: 

1- Glass food dishes: Originally cost us $2300

2- Food deliver bins: Cost us $1200

3- Thermo bin lines: Cost us $350

4- Ice packs: Cost us $300

Marketing tools:

1- Instagram + FB page: Combined 3000 followers

2- Website: $3000 in hosting and app fees since 2019 plus the 100+ hours it took us to make it

Recipes: 32 in total. Not sure how to calculate what this cost us in terms of the time it took to create them

Client base: Not sure what classification this falls under but we had many repeat customers every week.

If you can provide some further direction I would be so grateful!!