Lawyer A (incorporated) purchases business from Lawyer B (two incorporated business):
- Lawyer A purchases assets (law library, furniture, computers, etc) from Lawyer B’s Management Corp (holds assets) - $25,000.00
- Lawyer A purchases intangible assets (client list, goodwill, etc) from Lawyer B’s Professional corp (operating corp) - $40,000.00
The transaction is completed by a promissory note (due in over 1 year)
J/E - Lawyer A
Furniture $10,000
Computers $5,000
Law library $10,000
Long term debt / Private loan $25,000
Goodwill $40,000
Long term debt / Private loan $40,000
Therefore, tangible assets go into their CCA classes & Goodwill into class 14.1 (1/2 year rule will apply to all these assets).
On BS & T2 (s100):
Long-term debt $65,000
Furniture $10,000
Computers $5,000
Law library $10,000
Goodwill $40,000
Can anyone provide suggestions or comments to the above?
Greatly appreciated!