Selling a single owner LLC business, goodwill and tools

The goodwill is a Section 197 Intangible. Please see this answer from Susan H.

Goodwill

In addition to filing that final Schedule C, you also have to give IRS details about your asset sales. 

Even if you dispose of the business in a single sale to one buyer, the IRS requires you to separately determine the value of each asset—the kitchen appliances, furniture, store lease, etc.—so that each is treated properly for tax purposes.

Determining the assets’ market value allows you to calculate whether there is a taxable gain or loss in each case. You list the assets, plus the value and sale price of each, on Form 8594:  Asset Acquisition Statement under Section 1060. Attach it to the 1040 you file for the year in which the asset sales occurred.

Classes of assets.

The following definitions are the classifications for deemed or actual asset acquisitions. Allocate the consideration among the assets in the following order. The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date. The amount you can allocate to an asset is also subject to any applicable limits under the Internal Revenue Code or general principles of tax law.

• Class I assets are cash and general deposit accounts (including checking and savings accounts but excluding certificates of deposit).

• Class II assets are certificates of deposit, U.S. government securities, foreign currency, and actively traded personal property, including stock and securities.

• Class III assets are accounts receivable, other debt instruments, and assets that you mark to market at least annually for federal income tax purposes. However, see Regulations section 1.338-6(b)(2)(iii) for exceptions that apply to debt instruments issued by persons related to a target corporation, contingent debt instruments, and debt instruments convertible into stock or other property.

• Class IV assets are property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business.

• Class V assets are all assets other than Class I, II, III, IV, VI, and VII assets.
  Note. Furniture and fixtures, buildings, land, vehicles, and equipment, which constitute all or part of a trade or business are generally Class V assets.

• Class VI assets are section 197 intangibles (other than goodwill and going concern value).

• Class VII assets are goodwill and going concern value (whether the goodwill or going concern value qualifies as a section 197 intangible).