TN 13 (11-12)

RS 01803.130 Computing Net Earnings from Self-Employment (NESE) for the Year the Business is Sold

When determining NESE after selling a business, include income that comes from selling inventory or stock in gross receipts. Exclude income received from items that are not inventory; e.g., fixtures, goodwill, real estate.

When an individual sells his or her business, but retains ownership of accounts receivable:

  • Include collections in the year received, if you use the cash basis method of accounting.

  • Exclude collections if using the accrual method, since collections is NESE in the year of the sale.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0301803130
RS 01803.130 - Computing Net Earnings from Self-Employment (NESE) for the Year the Business is Sold - 11/20/2012
Batch run: 11/20/2012
Rev:11/20/2012