An asset sale occurs when the assets of your business are sold to a buyer. An asset sale will likely result in a combination of gain taxed at both ordinary and capital gains rates, depending on the nature of the individual assets.Asset sales can cover a range of transactions. You will need to allocate the amount reflected on form 8594 among all the assets. A typical method is to allocate the proceeds based on the original cost. Use Form 4797 to report: The sale or exchange of property. The involuntary conversion of property and capital assets. An asset sale is the sale of just the good stuff: the equipment, trademarks, and customer list, for example. In an asset sale, the buyer selects specific assets and typically avoids inheriting liabilities.