Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I am looking for opinions here because there are way too many posibilities. Here is the story. There is a personal service business providing professional massage therapy. It has been operating for 5 years as a sole propriatorship. It was incorporated in August of 2000 and elected to operate as an S corp. The owner is the sole officer and sole share holder of 500 shares out of the 60K authorized. Because the business was already established, there were few startup costs. All furniture, fixtures, supplies, and massage equipment was transferred to the corp in exchange for the 500 shares of stock (value about 8K). Gross sales are about 45K with expenses around 20K. The business is growing with a client list of about 1500 people.

Now the questions. How does one value a client list as an asset? Without the client list, the business would not exist. As the business grows and the client list gets bigger shouldn't that increase the value of the company? I ask this on the tax board because the company has only the client list as an asset. All the other equipment has been expensed while the company was a sole propriatorship. Filling out the balance sheet on Schedule L Form 1120S, cash is minimal (it was all dividended and bonused out) so the only asset is the client list.

I look forward to any and all opinions.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.